ACCOUNTING-E9-13 Determining Actual Costs, Standard Costs, and Variances [LO 9-3, 9-4]

QUESTION

E9-13 Determining Actual Costs, Standard Costs, and Variances [LO 9-3, 9-4]Amber Company produces iron table and chair sets. During October, Amber’s costs were as follows: Actual purchase price$ 2.30 per lb. Actual direct labor rate$ 7.50 per hour Standard purchase price$ 2.10 per lb. Standard quantity for sets produced970,000 lbs. Standard direct labor hours allowed11,000 Actual quantity purchased in October1,115,000 lbs. Actual direct labor hours10,000 Actual quantity used in October1,000,000 lbs. Direct labor rate variance$5,500 FRequired:1.Calculate the total cost of purchases for October.2.Compute the direct materials price variance based on quantity purchased. (Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable.)3.Calculate the direct materials quantity variance based on quantity used. (Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable.)4.Compute the standard direct labor rate for October. (Round your answer to 2 decimal places.)5.Compute the direct labor efficiency variance for October. (Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable.)

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