Assignment:
Arrow Industries employs a standard cost system in which direct materials inventory is carried at standard cost. Arrow has established the following standards for the prime costs of one unit of product.
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Standard
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Standard
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Standard
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Quantity
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Price
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Cost
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Direct materials
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8 pounds
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$1.80 per pound
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$14.40
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Direct labor
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0.25 hour
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$8.00 per hour
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$ 2.00
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During May, Arrow purchased 160,000 pounds of direct material at a total cost of $304,000. The total direct labor wages for May were $37,800. Arrow manufactured 19,000 units of product during May using 142,500 pounds of direct material and 5,000 direct labor hours.
Question 1. The direct material price variance for May is:
$16,000 favorable
$16,000 unfavorable
$14,250 favorable
$14,250 unfavorable
Question 2. The direct material quantity variance for May is:
$14,400 unfavorable
$1,100 favorable
$17,100 unfavorable
$17,100 favorable
Question 3. The direct labor rate variance for May is:
$2,200 favorable
$1,900 unfavorable
$2,000 unfavorable
$2,090 favorable
Question 4. The direct labor efficiency variance for May is:
$2,200 favorable
$2,000 favorable
$2,000 unfavorable
$1,800 unfavorable