In producing jelly beans, 1,000 hours of direct labor were used at a rate of $12 per hour. The standard was 1,100 at $12.25 per hour. What is the direct labor rate variance?

 In producing jelly beans, 4,700 pounds of direct materials were used at a cost of $2.50 per pound. The standard was 4,000 pounds at $2.75 per pound. What is the direct materials quantity variance?
 
multiple choice
$1,925 Favorable
$1,750 Favorable
$1,925 Unfavorable Correct
$1,750 Unfavorable

Explanation
Knowledge Check 01
 
Direct materials quantity variance = (Actual quantity of 4,700 pounds − Standard quantity of 4,000 pounds) × Standard price of $2.75 per pound = $1,925 U. The variance is unfavorable because more materials were used than standard allowed.

Who has the main responsibility for a materials price variance?
 
multiple choice
production manager
purchasing manager Correct

Explanation
Knowledge Check 01
 
A materials price variance, whether favorable or unfavorable, is the responsibility of the purchasing manager.

In producing jelly beans, 1,000 hours of direct labor were used at a rate of $12 per hour. The standard was 1,100 at $12.25 per hour. What is the direct labor rate variance?
 
multiple choice
$250 Unfavorable
$275 Favorable
$250 Favorable Correct
$275 Unfavorable
Explanation
Knowledge Check 01
 
Direct labor cost variance = (Actual rate of $12.00 per hour − Standard rate of $12.25 per hour) × Actual hours of 1,000 = $250 F. The variance is favorable since the actual price was lower than the standard price. 

 
Who has the main responsibility for a labor rate variance?
 
multiple choice
production manager Correct
purchasing manager

Explanation
Knowledge Check 01
 
A labor rate variance, whether favorable or unfavorable, is the responsibility of the production manager.

Thanks