Standard Cost System-Materials and Labor Variances

question 59

Essay

Standard cost system-materials and labor variances
Job no.811 involved the production of 200 units of product MF.The total standard and actual costs for materials and direct labor on this job are shown below:
Compute the following cost variances for job no.811.Indicate whether each variance is favorable (F)or unfavorable (U).
(a)Materials price variance: $________
(b)Materials quantity variance: $________
(c)Labor rate variance: $________
(d)Labor efficiency variance: $________

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Definitions:

Conversion Costs

Expenses related to converting raw materials into finished goods, including labor and overhead costs.

Opening Inventory

The value or quantity of goods on hand at the beginning of an accounting period.

FIFO Process Costing

A method of process costing that assumes the first items produced are the first sold or used, ideal for businesses where inventory shelf life is a concern.

Equivalent Unit

A concept in cost accounting used to measure the amount of work done on partial units of production, converting them into a number of fully completed units for costing purposes.