The
Chemung
Corporation manufactures lamps. It has set up the following standards per finished unit for direct materials and direct manufacturing? labor:
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?(Click the icon to view the? standards.)The number of finished units budgeted for January
2017
was
9,960?;
9,950
units were actually produced.
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?(Click the icon to view actual? data.)
…..
Assume that there was no beginning inventory of either direct materials or finished units. During the? month, materials purchased amounted to
99,600
?lb., at a total cost of
$557,760.
Input price variances are isolated upon purchase.?Input-efficiency variances are isolated at the time of usage.Read the requirements
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.
Requirement 1. Compute the January
2017
price and efficiency variances of direct materials and direct manufacturing labor.
?Let’s begin by calculating the actual input at the budgeted price. ?(Round your answers to the nearest whole? dollar.)
|
Actual input |
x |
Budgeted price |
= |
Cost |
|
|
Direct materials (purchases) |
99,600 |
x |
$5.40 |
= |
$537,840 |
|
Direct materials (usage) |
97,500 |
x |
$5.40 |
= |
$526,500 |
|
Direct manufacturing labor |
4,900 |
x |
$31.00 |
= |
$151,900 |
Next determine the formula and calculate the costs for the flexible budget.
|
x |
= |
Flexible budget cost |
|||
|
Direct materials |
x |
= |
|||
|
Direct manufacturing labor |
x |
= |
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