Direct-Material and Direct-Labor Variances

Direct-Material and Direct-Labor Variances


Problem 10-33 Direct-Material and Direct-Labor Variances (LO 10-1, 10-3)

During March, Manhattan Fabrics Corporation manufactured 1,000 units of a special multilayer fabric with the trade name Stylex. The following information from the Stylex production department also pertains to March.

Direct material purchased: 36,000 yards at $1.38 per yard



Direct material used: 19,000 yards at $1.38 per yard



Direct labor: 4,200 hours at $9.15 per hour



The standard prime costs for one unit of Stylex are as follows:

Direct material: 20 yards at $1.35 per yard $ 27

Direct labor: 4 hours at $9.00 per hour 36

Total standard prime cost per unit of output $ 63


Compute the following variances for the month of March. (Indicate the effect of each variance by selecting "Favorable" or "Unfavorable". Select "None" and enter "0" for no effect (i.e., zero variance).
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