Timber Enterprises purchased 67,000 pounds (cost = $616,400) of direct material to be used in the manufacture of the company's only product.According to the production speciﬁcations, each completed unit requires four pounds of direct material at a standard cost of $9 per pound.Direct materials consumed by the end of the period totaled 65,500 pounds in the manufacture of 16,050 ﬁnished units. An examination of Timber's payroll records revealed that the company worked 42,000 labor hours (cost = $621,600) during the period, and speciﬁcations called for each completed unit requiring 2.6 hours of labor at a standard cost of $15 per hour. Use the information to compute the following variances: Required: Calculate the direct-material price and quantity variances, and the direct-labor rate and eﬃciency variances.Indicate whether each variance is favorable or unfavorable.

Question

Quizplus · Accepted Answer

The Answer of Timber Enterprises purchased 67,000 pounds (cost = $616,400) of direct material to be used in the manufacture of the company's only product.According to the production speciﬁcations, each completed unit requires four pounds of direct material at a standard cost of $9 per pound.Direct materials consumed by the end of the period totaled 65,500 pounds in the manufacture of 16,050 ﬁnished units. An examination of Timber's payroll records revealed that the company worked 42,000 labor hours (cost = $621,600) during the period, and speciﬁcations called for each completed unit requiring 2.6 hours of labor at a standard cost of $15 per hour. Use the information to compute the following variances: Required: Calculate the direct-material price and quantity variances, and the direct-labor rate and eﬃciency variances.Indicate whether each variance is favorable or unfavorable.

Timber Enterprises Purchased 67,000 Pounds (Cost = $616,400) of Direct