# standard costing accounting

During May, Joliet Fabrics Corporation manufactured 500 units of a specail multilayer fabric with the trade name Stylex. The following information from the Stylex production department also pertains to May.

Direct material purchased: 18,000 yards at $1.38 per yard..........$24,840

Direct material used: 9,500 yards at $1.38 per yard.....................$13,110

Direct labor: 2,100 hours at $9.15 per hour..................................$19,215

The standard prime costs for one unit of Stylex are as follows:

Direct material: 20 yards at $1.35 per yard...................................$27

Direct labor: 4 hours at $9.00 per hour..........................................36

Total standard prime cost per unit of output...................................$63

Required: Compute the following variances for the month of May, indicating whether each variance is favorable or unfavorable.

1. Direct-material price variance.

2. Direct-material quantity variance.

3. Direct-labor rate variance.

4. Direct-labor efficiency variance.

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## Joliet Fabrics -Solution

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Please find xxxxxxxx xxxxx

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**Direct xxxxxxxx xxxxx variance x **x**PQ** × **AP)** **–** **xxx **× **SP)**

** x xxxxxx * 1.38) – (18,000 xxxxxx**

** = $24,840 – $24,300
**

** x = xxxx xxxxxxxxxxx**

**Direct xxxxxxxx xxxxxxxx variance x xxx x xxx – (SP x SQ)
**

** = xxxxxx x 1.35) – (1.35 x $10,000*)**

** x xxxx xxxxxxxxx**

50 units x xx yards per unit x xxxxxx xxxxxx

**Direct xxxxx xxxx variance x (AH x xxx – (AH x xxxx**

** x xxxxx x xxxxx – (2,100 * 9.00)
**

** x xxxxxxx x $19,800
**

** = $315 xxxxxxxxxxx**

**xxxxxx labor xxxxxxxxxx variance = xxx x SR) – xxx x xxxx**

** = (2,100 x 9.00) – (2,000* x 9.00)
**

** = xxxxxxx x $ 18,000
**

** = $900 Unfavorable**

* 500 units x x xxxxx per xxxx x xxxxxx

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## calculated, step by step

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**xxxxxxxx costing accounting**

xx xxxxxxxxxxxxxxx price variance. [Materials Price Variance x xxxxxxx quantity purchased × xxxxxx xxxxxx − (Actual xxxxxxxx purchased × xxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxx xxxxxxxx xxxxx xxxxxxxx exists xxxx the actual xxxxx of xxxxxxxxx xxxxxxxxx xx xxxx than xxx xxxxxxxx price xx materials purchased. A xxxxxxxx price xxxxxxxx is called xxxxxxxxxxx materials xxxxx variance xx xxx actual price of xxxxxxxxx xxxxxxxxx is xxxx xxxx xxx standard xxxxx of xxxxxxxxx purchased. Therefore its unfavorable.

2. Direct-material quantity xxxxxxxxxxxx Quantity xxxxxxxx = ( xx − AQ x × xxxxxxxxxxxx is the xxxxxxxx xxxxxxxx xxxxxxxxxx xx xxx actual quantity of direct xxxxxxxx xxxxxxx xx the standard price xxx xxxx of xxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxx xxxxxxxx = (Actual quantity used × Standard xxxxxx − (Standard xxxxxxxx allowed × Standard xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxx are used xxxx than what is allowed by standard xx unfavorable xxxxxxxx variance xxxxxxx xx xxxxxxxxx xxxx xx xxxx xxxx the quantity allowed x xxxxxxxxx xxxxxx xxxxxxxxx xxxxxxxx xxxxxxxx occurs. Therefore xx xx favorable.

xx Direct-labor xxxx xxxxxxxxxxxxx labor xxxx xxxxxxxx xx the difference

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## elaborated answers...

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1. xxxxxxxxxxxxxxx price xxxxxxxxx

[Materials Price Variance x xxxxxxx xxxxxxxx xxxxxxxxx xx xxxxxx xxxxxx xxx xxxxxxx xxxxxxxx xxxxxxxxx xx Standard xxxxxxx

xxxxxxxxxxxxxxxxxx

=24840-24300

xxxx

A xxxxxxxxx material xxxxx xxxxxxxx xxxxxx when xxx xxxxxx xxxxx xx xxxxxxxxx xxxxxxxxx xx xxxx than the xxxxxxxx xxxxx xx materials purchased. x material price variance is xxxxxx unfavorable materials xxxxx xxxxxxxx if xxx actual price xx xxxxxxxxx purchased is more xxxx the standard xxxxx xx materials xxxxxxxxxx

Therefore its xxxxxxxxxxxx

xx xxxxxxxxxxxxxxx xxxxxxxx xxxxxxxxx

xx xxxxxxxx Variance x x SQ − xx x xx xx

xxxxxx

SQ xx the xxxxxxxx quantity xxxxxxx

xx xx the actual xxxxxxxx of xxxxxx material xxxx

SP xx the standard xxxxx per unit of direct xxxxxxxx

[9500-20]*1.35

xxxxxxxxxx

xxxxxx

xx

xxxxxxxxxx xxxxxxxx variance x xxxxxxx xxxxxxxx used × Standard xxxxxx − xxxxxxxxx xxxxxxxx xxxxxxx xx xxxxxxxx xxxxxxx

9500*1.35-20*1.38

xxxxxxxxxx

=12797.4

When xxxxxxxxx are xxxx xxxx xxxx what xx xxxxxxx by xxxxxxxx an xxxxxxxxxxx quantity variance occurs. If materials used xx xxxx xxxx xxx quantity allowed a favorable direct materials quantity variance xxxxxxx

xxxxxxxxx it xx favorable.

3. xxxxxxxxxxxx rate xxxxxxxxx

xxx labor rate xxxxxxxx xx the xxxxxxxxxx xxxxxxx

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