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DATA INPUT
Control valves manufactured in March: 15,600 units
Actual costs:
Direct labor 80,200 hr. at 10.95$
Direct material purchased 50,000 lb. at 5.20$
Direct material used 46,200 lb.
Standard prime costs:
Direct material 3 lbs. at 5.00$ per lb 15.00$
Direct labor 5 hrs. at 11.25$ per hr. 56.25
Standard prime cost per unit 71.25$
SOLUTION
1. Schedule of standard production costs, based on actual production of 15,600 units:
Standard
Costs
Direct material 15,600 units x 3 lbs x 5.00$ = 234,000$
2. Variances:
a) Direct-material price variance = (AQ x AP) - (AQ x SP)
= 46,200 x 5.20$ - 46,200 x 5.00$
c) Direct-material purchase price variance = (PQ x AP) - (PQ x SP)
d) Direct-labor rate variance = (AH x AR) - (AH x SR)
= 80,200 x 10.95$ - 80,200 x 11.25$
For the Month of March
Valport Valve Company
Shreveport Plant
Schedule of Standard Production Costs
Based on 15,600 Units
