Direct materials price variance and direct materials


Medford Tooling uses a standard cost system to account for the costs of its one product. Standards are 4 sheets of ½ inch steel at $110 per sheet and 14 hours of labor at a standard wage rate of $13. During July, Medford Tooling produced 600 units. Materials purchased and used totaled 2,540 sheets at a total cost of $268,850. Payroll totaled $112,930 for 8,770 hours worked. Calculate the following variances:

a. direct materials price variance

b. direct materials quantity variance

c. direct labor rate variance

d. direct labor efficiency variance

Solution Preview :

Prepared by a verified Expert
Accounting Basics: Direct materials price variance and direct materials
Reference No:- TGS02574634

Now Priced at $10 (50% Discount)

Recommended (92%)

Rated (4.4/5)