Please refer to the standard unit data for the Wolverine Company of Michigan from the data provided:
Direct Material Price Variance
Direct Materials Usage Variance
Direct Labor Variance
Direct Labor Efficiency Variance
Use these sources to define each variance category and how data for it is commonly collected. Foe each variance category for this specific case, discuss how you computed the value and explain its use in evaluating operational results. Characterize whether the variance is favorable/Unfavorable. In this case, which 2 categories require management attention as a priority.
Normal volume oer month is 40, 000 direct labor hrs. Wolverine's January 2014 budget was based on normal volume. During January, Wolverine produced 7,800 units with record indicatingthe data ff:
Actual: The Woverine Co Standards:
Direct Mat. purchased 25,000 lbs @ 3.60 Direct Material (2 ilbs @ $3.50 per lb) $7.00
Direct Material used 23,100 lbs Direct Labor (4 hour @ $6.50 per hr) $26.00
Direct Labor 40,100 hours @ $6.30 STANDARD COST PER UNIT $33.00