Ponte Company produced 2,500 widgets during December using 4,000 units of materials at a cost of $5.00 each. It also used 5,000 direct labour hours at a rate of $7.00 per hour. Its direct materials standard is 2 units per widget. Its direct labour standard is 2.5 hours per widget.
Its materials price variance was a favourable $8,000, and its labour rate variance was an unfavourable $1,000.
Required:
A. Calculate the standard materials price per unit.
B. Calculate the standard labour rate.
C. Determine the materials usage variance and whether it is favourable or unfavourable.
D. Determine the labour efficiency variance and whether it is favourable or unfavourable.

Question

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The Answer of Ponte Company produced 2,500 widgets during December using 4,000 units of materials at a cost of $5.00 each. It also used 5,000 direct labour hours at a rate of $7.00 per hour. Its direct materials standard is 2 units per widget. Its direct labour standard is 2.5 hours per widget.
Its materials price variance was a favourable $8,000, and its labour rate variance was an unfavourable $1,000.
Required:
A. Calculate the standard materials price per unit.
B. Calculate the standard labour rate.
C. Determine the materials usage variance and whether it is favourable or unfavourable.
D. Determine the labour efficiency variance and whether it is favourable or unfavourable.

Ponte Company Produced 2,500 Widgets During December Using 4,000 Units