Problem 1: Compute materials, labor, and overhead variances
The following data apply to Roseanne Company for August, when 2,500 units were produced:
Materials used: 16,000 pounds
Standard materials per unit: 6 pounds at $5 per pound
Materials purchased: 24,000 pounds at $4.80 per pound
Direct labor: 5,800 hours at a total cost of $69,600
Standard labor per unit: 2 hours at $11 per hour.
Required:
a. Compute the materials and labor variances.
b. Prepare journal entries to record the transactions involving these variances.
Problem 2: Compute materials variances
During April, Shakespeare Company produced 15,000 units of a product called Creative. Creative has a standard materials cost of two pieces per unit at $8 per piece. The actual materials used Consisted of 30,000 pieces at a cost of $230,000. Actual purchases of the materials amounted to 40,000 pieces at a cost of $300,000.
Required: Compute the two materials variances.