Cost Management: A Strategic Emphasis 7th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 31

Direct Materials and Direct Labor Variances Schmidt Machinery Company (Exhibit 14.5) used 3,450 pounds of aluminum in June to manufacture 920 units. The company paid $28.50 per pound during the month to purchase aluminum. On June 1, the company had 50 pounds of aluminum on hand. At the end of June, the company had only 30 pounds of aluminum in its warehouse. Schmidt used 4,200 direct labor hours in June, at an average cost of $41.50 per hour.
Required Compute for June:
1. Schmidt's purchase-price and usage variances for aluminum.
2. Schmidt's direct labor rate and efficiency variances.
EXHIBIT 14.5 Standard Cost Sheet, Product XV-1