# Exercise 14-26 Direct Materials and Direct Labor Variances [LO 14-3] Assume that Schmidt Machinery Company had...

###### Question:

Exercise 14-26 Direct Materials and Direct Labor Variances [LO 14-3]

Assume that Schmidt Machinery Company had the standard costs reflected in Exhibit 14.5. In a given month, the company used 3,485 pounds of aluminum to manufacture 927 units. The company paid $29.20 per pound during the month to purchase aluminum. At the beginning of the month, the company had 57 pounds of aluminum on hand. At the end of the month, the company had only 37 pounds of aluminum in its warehouse. Schmidt used 4,550 direct labor hours during the month, at an average cost of$42.20 per hour.

Required:

Compute for the month the following variances:

1. The purchase-price variance for aluminum. Indicate whether this variance is favorable (F) or unfavorable (U).

2. The usage variance for aluminum. Indicate whether this variance is favorable (F) or unfavorable (U).

3. The direct labor rate variance. Indicate whether this variance is favorable (F) or unfavorable (U).

4. The direct labor efficiency variance. Indicate whether this variance is favorable (F) or unfavorable (U).

EXHIBIT 14.5 Standard Cost Sheet, Product XV-1 Subtotal Total SCHMIDT MACHINERY COMPANY Standard Cost Sheet Product: XV-1 Descriptions Quantity Cost Rate Direct materials: Aluminum 4 pounds $25/pound PVC 1 pound 40/pound Direct labor 5 hours 40/hour Variable factory overhead 5 hours 12/hour Total variable manufacturing cost Fixed factory overhead* 5 hours 24/hour Standard manufacturing cost per unit Standard variable selling and administrative cost per unit$100 40 200 60 $400 120$520 $50 *Budgeted fixed factory overhead cost =$120,000.

#### Similar Solved Questions

##### If f(x) = x^2-4 and g is a differentiable function of x, what is the derivative of f(g(x))?
If f(x) = x^2-4 and g is a differentiable function of x, what is the derivative of f(g(x))?...
##### We The Pound to arundomy weddy who was only way to Swa r owy 2006 maybe...
We The Pound to arundomy weddy who was only way to Swa r owy 2006 maybe some more to be made by sa A The Other more to che OD. The more you can siano The data represent the number of driving fatalities for a certain area by age for male and female drivers. Male Female under 16 179 129 16-20 5662 206...
##### You have 775 mL of an 0.15 M acetic acid solution. What volume (V) of 1.80...
You have 775 mL of an 0.15 M acetic acid solution. What volume (V) of 1.80 M NaOH solution must you add in order to prepare an acetate buffer of pH = 4.65? (The pKa of acetic acid is 4.76.)...
##### Portfolio with combinations of assets with low or negative correlation tend to display lower volatility than...
Portfolio with combinations of assets with low or negative correlation tend to display lower volatility than the individual assets or portfolios of assets with positive correlation? True or False and why?...
##### What is an equation that will move the graph of the function y = |x| left 2 units and up 5 units?
What is an equation that will move the graph of the function y = |x| left 2 units and up 5 units?...
##### 1(c) Assume that beginning inventory for ABC is 2,300,000 kg. Ending inventory is 3,800,000 kg. The...
1(c) Assume that beginning inventory for ABC is 2,300,000 kg. Ending inventory is 3,800,000 kg. The fruit prices and amount purchased is provided in Table 1 below. Compute the LIFO and FIFO COGS for ABC for the period. If ABC wishes to report a larger profit, should LIFO or FIFO be used? Table 1: F...
##### OR Sheel Homework 1 Due beforeclass Tuesday Jan 8 A mass of 1.0 kg attached to...
OR Sheel Homework 1 Due beforeclass Tuesday Jan 8 A mass of 1.0 kg attached to a string oscillates with a frequency of 2.0 Hz and an amplitude of 22.0 cm. 1. Where is the mass at t-0.08s and t-0.15s 2. When is the mass at x--0.12 m? Strategy: Identify equation and identify constants 1. Substitute t...