Basic Price and Quantity Variances for Labor and Materials

question 1

Essay

Basic Price and Quantity Variances for Labor and Materials
Arrow Industries employs a standard cost system in which direct materials inventory is carried at standard cost.Arrow has established the following standards for the direct costs of one unit of product.
During May,Arrow purchased 160,000 pounds of direct materials at a total cost of $304,000.The total factory wages for May were $42,000,90 percent of which were for direct labor.Arrow manufactured 19,000 units of product during May using 142,500 pounds of direct material and 5,000 direct labor hours.
Required:
a.Calculate the direct materials price variance for May.
b.Calculate the direct materials quantity variance for May.
c.Calculate the direct labor wage rate variance for May.
d.Calculate the direct labor efficiency variance for May.

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Definitions:

Crude Supply

Indicates the total quantity of crude oil available for refining or processing, coming from domestic production or imports.

Polluter Pays Principle

A principle in environmental policy that requires those who produce pollution to bear the costs of managing it to prevent damage to human health or the environment.

Advance Disposal Fees

Advance disposal fees are charges paid upfront by consumers for the future recycling or disposal of products, particularly those that are hazardous or difficult to dispose of.

Take Back Mandates

Regulations or policies requiring companies to retrieve and responsibly dispose or recycle their products at the end of their life cycle.