Problem - Direct materials and direct labor variance analysis
Faucet Industries Inc. manufactures faucets in a small manufacturing facility. The faucets made from zinc. Manufacturing has 60 employees. Each employee presently provides 36 of labor per week. Information about a production week is as follows:
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Standard wage per hr.
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$18.00
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Standard labor time per faucet
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12 min.
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Standard number of lbs. of zinc
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0.80 lb.
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Standard price per lb. of zinc
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$1.25
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Actual price per lb. of zinc
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$1.40
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Actual lbs. of zinc used during the week
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10,200 lbs.
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Number of faucets produced during the week
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12,000
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Actual wage per hr.
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$18.75
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Actual hrs. per week
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2,160 hrs.
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Instructions - Determine (a) the standard cost per unit for direct materials and direct labor; (b) the price variance, quantity variance, and total direct materials cost variance; and (c) the rate variance, time variance, and total direct labor cost variance.