Question

Assume the following: - The standard price per pound is $2.00. - The standard quantity of pounds allowed per unit of finished goods is 4 pounds. - The actual quantity of materials purchased was 53,000 pounds, whereas the quantity of materials used in production was 50,000 pounds. - The actual purchase price per pound of materials was $2.25. - The company produced 13,000 units of finished goods during the period. What is the materials quantity variance? Multiple Choice $4,000 F $6,750 F $4,500 F $6,000 F Assume the following: - The standard labor rate per hour is $17.00. - The standard labor-hours allowed per unit of finished goods is 3 hours. - The actual quantity of labor hours worked during the period was 44,000 hours. - The labor rate variance is $22,000 F. - The company produced 15,000 units of finished goods during the period. The actual direct labor wage rate per hour is closest to: Multiple Choice $16.50. $16.25. $16.00. $15.75.

Answer 1

The materials quantity variance is $4,000 favorable, indicating that the company was efficient in using less material than the standard quantity. For labor wage rate, the calculated rate of $17.89 doesn't match the provided multiple choices, suggesting a potential error in the options or the data given.

Step-by-step explanation:

To calculate the materials quantity variance, we focus on the quantity of materials used in production, not what was purchased. We use the following formula:

Materials Quantity Variance = (Standard Quantity - Actual Quantity) × Standard Price

The standard quantity allowed for 13,000 units is 4 pounds per unit:

Standard Quantity = 13,000 units × 4 pounds/unit = 52,000 pounds

The actual quantity used is 50,000 pounds, and the standard price per pound is $2.00.

So, the materials quantity variance is calculated as:

Materials Quantity Variance = (52,000 pounds - 50,000 pounds) × $2.00/pound

Materials Quantity Variance = 2,000 pounds × $2.00/pound = $4,000

Since the company used less material than the standard quantity, this variance is favorable (F).

Therefore, the correct answer is $4,000 F.

For the second question, we know the labor variance and need to find the actual wage rate. We first need to find the standard labor cost:

Standard Labor Cost = Standard Hours × Standard Rate

The standard labor-hours allowed for 15,000 units is:

Standard Hours = 15,000 units × 3 hours/unit = 45,000 hours

The labor rate variance is given:

Labor Rate Variance = Actual Labor Cost - Standard Labor Cost

$22,000 F = (Actual Rate × Actual Hours) - (Standard Rate × Standard Hours)

$22,000 F = (Actual Rate × 44,000 hours) - ($17.00 × 45,000 hours)

Now we solve for the Actual Rate:

$22,000 + ($17.00 × 45,000 hours) = Actual Rate × 44,000 hours

Actual Rate = ($22,000 + $765,000) / 44,000 hours

Actual Rate = $787,000 / 44,000 hours

Actual Rate = $17.89 (approximately)

This is not in line with the multiple-choice options provided. Please review the multiple-choice options or the given data.

Answer 2

The materials quantity variance is $6,000 F. The actual direct labor wage rate per hour is closest to $16.50.

Step-by-step explanation:

The materials quantity variance can be calculated by the formula: (Standard Quantity - Actual Quantity) x Standard Price. In this case, the standard quantity of pounds allowed per unit is 4 pounds, while the actual quantity of materials used is 50,000 pounds. Plugging these values into the formula, we get (4 - 50,000) x $2.00 = $6,000 F. Therefore, the materials quantity variance is $6,000 F.

To find the actual direct labor wage rate per hour, we can use the labor rate variance formula: Labor Rate Variance = (Standard Labor Rate - Actual Labor Rate) x Actual Labor Hours. We know that the labor rate variance is $22,000 F, and the actual labor hours worked are 44,000 hours. Rearranging the formula, we get Actual Labor Rate = (Labor Rate Variance / Actual Labor-Hours) + Standard Labor Rate. Plugging in the values, we get Actual Labor Rate = ($22,000 / 44,000) + $17.00 = $16.50. Therefore, the actual direct labor wage rate per hour is closest to $16.50.