Basil Tooling Uses a Standard Cost System to Account for the Costs

question 119

Essay

Basil Tooling uses a standard cost system to account for the costs of its one product.Standards are 4 sheets of ½-inch steel at $110 per sheet and 14 hours of labor at a standard wage rate of $13.During July,Basil Tooling produced 600 units.Materials purchased and used totaled 2,540 sheets at a total cost of $268,850.Payroll totaled $112,930 for 8,770 hours worked.Calculate the:
a.direct materials price variance.
b.direct materials quantity variance.
c.direct labor rate variance.
d.direct labor efficiency variance.

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Definitions:

Unit Product Cost

The total cost (both fixed and variable) associated with producing a single unit of product.

Absorption Costing

A costing method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - in the cost of a product.

Total Period Cost

The sum of all costs incurred during a specific financial period, encompassing both manufacturing and non-manufacturing expenses.

Absorption Costing

An accounting method that includes all manufacturing costs (both fixed and variable) in the cost of a product.