E9-7 (Algo) Calculating Direct Material and Direct Labor Variances [LO 9-3, 9-4]
Betty's Bakery has the following standard cost sheet for one unit of its most popular cake:
Direct materials
Direct labor
SQ
1.2 pounds
0.8 hours
SP
$ 1.50 per pound
$ 12.00 per hour
During the month of May, the company made 840 cakes and incurred the following actual costs:
Direct materials purchased and used (1,220 pounds), $1,586
Direct labor (900 hours), $10,350
Required:
1. Calculate the direct materials price variance.
2. Calculate the direct materials quantity variance.
3. Calculate the direct materials spending variance.
4. Calculate the direct labor rate variance.
5. Calculate the direct labor efficiency variance.
6. Calculate the direct labor spending variance.
Note: For all requirements, Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None"
for no effect (i.e., zero variance). Round your intermediate calculations to two decimal places.
1. Direct materials price variance
2. Direct materials quantity variance
3. Total direct materials spending variance
4. Direct labor rate variance
5. Direct labor efficiency variance
6. Total direct labor spending variance
