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dxpayne dxpayne
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Posts: 930
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5 years ago
The following data for the lew grow Garden Supplies Company pertains to the production of 2,500 garden spades during March. The spade consists of a wooden handle and a metal forged tool that comes in contact with the ground.

Direct Materials (all materials purchased were used):

   Standard cost: $1.00 per handle and $3.50 per metal tool.
   Total actual cost: $11,350.
   Materials flexible-budget efficiency variance was $650 unfavourable.

Direct Manufacturing Labour:

   Standard cost is 5 garden spades per hour at $20.00 per hour.
   Actual cost per hour was $21.00.
   Labour efficiency variance was $400 favourable.

Required:
a.   What is the standard direct material amount per garden spade?
b.   What is the standard cost allowed for all units produced?
c.   What is the total direct materials flexible-budget variance?
d.   What is the direct material flexible-budget rate variance?
e.   What is the total actual cost of direct manufacturing labour?
f.   What is the labour rate variance for direct manufacturing labour?
Textbook 

Cost Accounting: A Managerial Emphasis, Canadian Edition


Edition: 7th
Authors:
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Answer verified by a subject expert
pachopacho
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Top Poster
Posts: 682
5 years ago
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More solutions for this book are available here
a.
Standard cost per garden spade   = $1.00 (handle) + $3.50 (tool)
   = $4.50 per garden spade
b.
Standard cost allowed for all units   = 2500 × $4.50
   = $11,250 per garden spade
c.
Total materials variance    = $11,250 - $11,350
   = $100 unfavourable
d.
Materials rate variance   = Total variance - efficiency variance
   = ($11,350 - $11,250) - $650 unfavourable
   = $550 favourable
e.
Total standard labour cost of actual hours   = ((2500/5) × $20) - $400 favourable
   = $9,600
   Actual hours   = $9600/20 = 480 hours
   Total actual costs   = 480 × $21 = $10,080
f.
Labour rate variance   = $9,600 - $10,080
   = $480 unfavourable
This verified answer contains over 130 words.
-Michigan State University

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dxpayne Author
wrote...
4 years ago
I see. Hmm...

Thanks for confirming, will mark this solved.
wrote...
A year ago
thanls!
wrote...
A year ago
Thx
wrote...
A month ago
Thx
wrote...
3 weeks ago
Thank you
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