Tiger,Inc,Has Developed the Following Standard Cost Data Based on 60,000 $\begin{array}{llr} \text {Direct materials (6 lbs. @\$2/1b.) } & \$12\\ \text {Directlabor(1hrs.@\$8/hr.) } &8\\\end{array}$

question 92

Essay

Tiger,Inc.,has developed the following standard cost data based on 60,000 direct labor hours,which is 75% of capacity:
$\begin{array}{llr} \text {Direct materials (6 lbs. @\$2/1b.) } & \$12\\ \text {Directlabor(1hrs.@\$8/hr.) } &8\\\end{array}$


During the last period,the company operated at 80% of capacity and produced 128,000 units.Actual costs were:
$\begin{array}{llr} \text {Direct materials (760,000 } &\$ 1,558,000\\ \text { lbs.)} &\\ \text { Direct labor } (126.000 \mathrm{hrs}&1.014 .300 \end{array}$

Determine the direct materials price and quantity variances and the direct labor rate and efficiency variances.Indicate whether each variance is favorable or unfavorable.

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Definitions:

Gross Method

An accounting method for recording purchases at the full invoice price without deducting any cash discounts offered.

Cash Discounts

A reduction in the amount owed by a customer if payment is made within a specified time frame.

Period-End Adjusting Entry

An accounting record made at the end of an accounting period to allocate income and expenditures to the appropriate period.

Delivery Expense

Costs incurred by a company to transport its products to customers, including freight, shipping, and handling charges.