The Standard Costs for a Unit of Product Are Shown

question 50

Essay

The standard costs for a unit of product are shown below. $\begin{array}{llcc} \text { Materials: } & \text { 2 pounds at \( \$ 1.50 \) per pound } &\$3.00 \\ \text { Labor:} & \text { \( 3 / 4 \) hours at \( \$ 10.00 \) per hour }&7.50 \\ \text {Overhead: } & \text { \( 60\%\) of direct labor } &4.50\\\end{array}$
During July, Job N-5 for 200 units was completed. The actual costs of the job are shown below. $\begin{array}{llcc} \text { Materials: } & \text { 408 pounds at \( \$ 1.45 \) per pound } &\$591.60 \\ \text { Labor:} & \text { 142 hours at \( \$ 10.15 \) per hour }&1,441.30 \\ \text {Overhead Applied: } & \text { \( 60\%\) of direct labor } &864.78\\\end{array}$ 1. What is the total cost variance between actual cost and standard cost?
2. What is the total material variance?
3. What is the material quantity variance?
4. What is the material price variance?

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Definitions:

Outputs

The final goods or services produced by an economic system or enterprise, resulting from the input of resources like labor and capital.

U-shaped Curve

A graphical representation showing a relationship where initial decreases are followed by increases, resulting in a curve shaped like the letter "U."

Long-run

A period in which all factors of production and costs are variable, allowing firms to adjust all input levels and technology to find the most efficient scale of operations.