The following data for the telephone company pertain to the production of 450 rolls of telephone wire during June. Selected items are omitted because the costing records were lost in a windstorm.

Direct Materials (All materials purchased were used)

Standard cost per roll: a pounds at $4.00 per pound

Total actual cost: b pounds costing $9600.

Standard cost allowed for units produced was $9000

Materials price variance: c

Materials efficiency variance was $80 unfavorable.

Direct Manufacturing Labor

Standard cost is 3 hours per roll at $8.00 per hour

Actual cost per hour was $8.25

Total actual cost: d

Labor price variance: e

Labor efficiency variance was $400 unfavorable.

Required:

Compute the missing elements in the report represented by the lettereditems.

a. Standard Quantity= 2250

b. Actual Quantity= 2570

c. Material Price Variance= 680 Fav

d. Total actual cost $ 10725

e. Labor price variance  $ 325

Explanation:

Telephone Company

Direct Materials (All materials purchased were used)

Standard cost per roll: a  2250 pounds at $4.00 per pound

Total actual cost: b  2570 pounds costing $9600.

Actual unit Price = $ 9600/2570= $ 3.75

Standard cost allowed for units produced was $9000

Material Price Variance= (Actual Price * Actual Quantity)- (Standard Price * Actual Quantity)

Material Price Variance= (3.75*2570)- 4*2570= 9600- 10280= 680 Fav

Material yield variance is also called Material Efficiency variance = (Actual unit usage - Standard unit usage) x Standard cost per unit

$ 80= (Actual units- $ 9000/$4) *$4

$80 *4= (Actual units- 2250)

320+ 2250= Actual Units

Actual Units= 2570

Materials efficiency variance was $80 unfavorable.

Direct Manufacturing Labor

Standard cost is 3 hours per roll at $8.00 per hour

Actual cost per hour was $8.25

Total actual cost:  1300 hours * $8.25= $ 10725

Labor price variance: (actual hours* actual rate)- (actual hours * standard rate)

Labor price variance = $ 10725- 1300*8=  $ 10725-$ 10400= $ 325

Labor efficiency variance was $400 unfavorable= Standard Hours *Standard Rate - Actual Hours *Standard Rate

400= (3*450*8)-(Actual Hours *8)

10800-400= (Actual Hours *8)

(Actual Hours) =10400/8= 1300