Lionaire, Inc During the Last Period, the Company Operated at 80% of on 60,000

question 117

Essay

Lionaire, Inc. has developed the following standard cost data based on 60,000 direct labor hours, which is 75% of capacity.
$$\begin{array} { | l | l | } \hline & \text { Per Unit } \\\hline \text { Direct materials (61bs. @\$2.00/1b.) } & \$ 12.00 \\\hline \text { Direct labor (1hrs.@\$8.00/hr.) } & 8.00 \\\hline\end{array}$$ During the last period, the company operated at 80% of capacity and produced 128,000 units. Actual costs were:
$$\begin{array} { | l | l | } \hline \text { Direct materials } ( 760,000 \mathrm { lbs } . ) & \$ 1,558,000 \\\hline \text { Direct labor } ( 126,000 \mathrm { hrs } . ) & 1,014,300 \\\hline\end{array}$$ Determine the direct materials price and quantity variances and the direct labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.
$$\begin{array} { | l | l | } \hline \text { Direct materials: } &\quad\quad\quad\quad \\\hline \text { Price variance } & \\\hline \text { Quantity variance } & \\\hline & \\\hline \text { Direct labor: } & \\\hline \text { Rate variance } & \\\hline \text { Efficiency variance } & \\\hline\end{array}$$

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Definitions:

Sensory Capacities

The maximum ability of the sensory system to detect, process, and respond to stimuli from the environment.

Sensory-Motor Skills

Skills involving the coordination of sensory inputs (like seeing or hearing) with motor actions, critical in childhood development for tasks like grasping and walking.

Physical Growth

The process by which a living organism increases in size and matures in physical characteristics.

Habituation

The psychological process through which an individual becomes accustomed to a stimulus and hence reacts less strongly over time.