Townsend Incorporated Has Set the Following Standards for One Unit

question 26

Essay

Townsend Incorporated has set the following standards for one unit of product:
Direct material
Quantity: 8.2 pounds per unit
Price: $12.50 per pound
Direct labour
Quantity: 8 hours per unit
Rate: $25 per hour
Actual costs incurred in the production of 3,000 units were as follows
Direct material: $246,000 ($12.00 per pound)
Direct labour: $454,500 ($22.50 per hour)
All materials purchased were consumed during the period.
Required:
Calculate the direct-material price and quantity variances, and the direct-labour rate and efficiency variances. Indicate whether each variance is favourable or unfavourable.

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Definitions:

Bossy

Tending to give people orders in a domineering manner, often excessively and without proper authority.

Controlling

Exerting power or influence over others in a way that limits their autonomy or freedom.

High Neuroticism

An elevated level of the personality trait involving more frequent or intense experiences of negative emotions such as anxiety and depression.

Health Problems

Physical or mental conditions that affect an individual's well-being, ranging from minor illnesses to serious diseases.