At the beginning of August, Havasu Printers Company budgeted 30,000 books to be printed in August at...

Question

At the beginning of August, Havasu Printers Company budgeted 30,000 books to be printed in August at standard direct materials and direct labor costs as follows:

The standard materials price is $0.40 per pound. The standard direct labor rate is $12 per hour. At the end of August, the actual direct materials and direct labor costs were as follows:

There were no direct materials price or direct labor rate variances for August. In addition, assume no changes in the direct materials inventory balances in August. Havasu Printers Company actually produced 24,500 units during August.

Determine the direct materials quantity, direct labor time variances, and the total variance.

Robert · Accepted Answer

A. 
Direct material quantity variance = (Standard Quantity – Actual Quantity) x standard price  
      = (30,000 – 24,500) x 0.4 
      = 2,200 
B. 
Direct labor time variance             = (Standard rate – Actual rate) x Actual hours  
      = (12 – 10) x 6000 
      = 12,000 
C.

At the beginning of August, Havasu Printers Company budgeted 30,000 books to be printed in August at standard direct materials and direct labor costs as follows: The standard materials price is $0.40...

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