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:

Successful Interview

A meeting or conversation that achieves its intended purpose, often leading to a job offer or the gathering of valuable information.

Perfectly Competitive Industry

A market structure where many firms sell identical products, entry and exit are easy, and no single firm can influence the market price.

Market Shares

The percentage of an industry's total sales that is earned by a particular company over a specified time period.

Market Price

The current price at which an asset or service can be bought or sold in the marketplace.