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.

---

Definitions:

Specialization of Labor

The division of labor where individuals focus on a limited scope of tasks or skills, leading to increased efficiency and productivity.

Average Fixed Costs

The fixed costs of production (costs that do not vary with the level of output) divided by the quantity of output produced.

Output

Output is the total amount of goods or services produced by a person, machine, business, or country.

Average Costs

Average costs refer to the total cost of production divided by the number of units produced, indicating the cost of producing each unit.