Question #
|
Expected production (units)
|
15,000
|
|
Standard DML hours per unit
|
7
|
|
Standard DML rate per hour
|
$26
|
|
Standard pounds of DM usage per unit
|
3
|
|
Standard DM price per pound
|
$14
|
|
|
|
|
Actual
|
|
Units produced
|
16,000
|
|
Pounds of DM purchased
|
53,000
|
|
Total cost of DM purchased
|
$689,000
|
|
Pounds of DM used
|
50,000
|
|
DML hours worked
|
106,000
|
|
Total cost of DML
|
$2,968,000
|
a) Calculate the following variances:
Direct manufacturing labor rate variance
Direct manufacturing labor usage variance
Direct materials price variance (how we did it in the chat session)
Direct materials usage variance
b) Explain what each of the calculated variances imply about the firm's operations. Be specific!
Direct manufacturing labor rate variance
Direct manufacturing labor usage variance
Direct materials price variance
Direct materials usage variance