USA: +1 725-224-8795 
Sign in
Sonne Company produces a perfume called Whim. The direct materials and direct labor standards for one bottle of Whim are given below: During the most recent month, the following activity was recorded. a. 14, 850 ounces of material were purchased at a cost of $2.00 per ounce. b. All of the material was used to produce 1, 500 bottles of whim. c. 600 hours of direct labor time were recorded at a total labor cost of $4, 200. 1. Compute the direct materials price and quantity variances for the month. (Input all amounts as positive values. Do not round your per unit rates. Leave no cells blank – be certain to enter “0” wherever required. Indicate the effect of each variance by selecting “F” for favorable, “U” for unfavorable, and “None” for no effect (i.e., zero variance). Round your intermediate calculations and final answers to the nearest dollar amount. Omit the “$” sign in your response.) 2. Compute the direct labor rate and efficiency variances for the month. (Input all amounts as positive values. Do not round your per unit rates, round other intermediate calculations and your final answer to nearest whole dollar. Leave no cells blank- be certain to enter “0” wherever required indicate the effect of each variance by selecting “F” for favorable, ” U” for unfavorable, and “None” for no effect (i.e., zero variance). Round your intermediate calculations and final answers to the nearest dollar amount Omit the “$” sign in your response.)
Expert Answer
Answer 1.
Direct Materials Price Variance:
Actual Quantity = 14,850 ounces
Actual Rate = $2.00 per ounce
Standard Rate = $2.10 per ounce
Direct Materials Price Variance = (Actual Rate – Standard Rate)*Actual Quantity
Direct Materials Price Variance = ($2.00 – $2.10)*14,850
Direct Materials Price Variance = $1,485 Favorable
Direct Material Quantity Variance:
Actual Quantity = 14,850 ounce
Standard Rate = $2.10 per ounce
Standard Quantity = 7.90 ounces per unit * 1,500 unit
Standard Quantity = 11,850 ounces
Direct Material Quantity Variance = (Actual Quantity – Standard Quantity)*Standard Rate
Direct Material Quantity Variance = (14,850 – 11,850) * $2.10
Direct Material Quantity Variance = $6,300 Unfavorable
Answer 2.
Direct Labor Rate Variance:
Actual Hours = 600
Actual Cost = $4,200
Standard Rate = $5.00 per hour
Direct Labor Price Variance = Actual Cost – Standard Rate*Actual Quantity
Direct Labor Price Variance = $4,200 – $5.00*600
Direct Labor Price Variance = $1,200 Unfavorable
Direct Labor Efficiency Variance:
Actual hours = 600
Standard Rate = $5.00 per hour
Standard hours = 0.50 hours per unit * 1,500 unit
Standard hours = 750
Direct Labor Efficiency Variance = (Actual Hours – Standard hours)*Standard Rate
Direct Labor Efficiency Variance = (600 – 750) *$5.00
Direct Labor Efficiency Variance = $750 Favorable
