Normal volume per month is 40,000 direct labor hours. Wolverine's January 2014 budget was based on normal volume. During January, Wolverine produced 7,800 units with records indicating the data following:
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Actual:
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Direct materials purchased
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25,000 lbs @ $3.60
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Direct materials used
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23,100 lbs
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Direct labor
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40,100 hours @ $6.30
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(excluding overhead)
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The Wolverine Company Standards:
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Direct Materials (2 lbs @ $3.50 per lb.)
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$7.00
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Direct Labor (4 hours @ $6.50 per hour)
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$26.00
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STANDARD COST PER UNIT
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$33.00
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Determine the following:
Direct materials price variance
Direct materials usage variance
Direct labor variance
Direct labor efficiency variance