QQuestionAnatomy and Physiology
QuestionAnatomy and Physiology
Demizio Valley Orchards, Inc. (DVO), developed standard costs for direct material and direct labor. In 2015, DVO estimated the following standard costs for one of their most well lovedproducts, the DVO classic Grandma's large apple pie which had a brown sugar coating on the top of the crust as well as including cranberry and mince ingredients in addition to the apples.
| | Budgeted
quantity | Budgeted
price |
| --- | --- | --- |
| Direct
materials | 4 pounds | $\$ 5.4$ per
pound |
| Direct labor | 0.9 hours | $\$ 14$ per
hour |
During September, DVO produced and sold 2,000 pies using 8,300 pounds of direct materials at an average cost per pound of $\$ 5$ and 1,760 direct labor hours at an average wage of $\$ 14.40$ per hour. The direct labor price variance during September is $\qquad$ . A. $\$ 704.00$ unfavorable B. $\$ 704.00$ favorable C. $\$ 560.00$ unfavorable D. $\$ 720.00$ favorable
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Answer
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Step 1: Calculate the actual direct material cost per pound.
Actual direct material cost = $\$5$ per pound * 8,300 pounds = $\boxed{\$41,500}$
Step 2: Calculate the standard direct material cost for the actual quantity of direct materials used.
Standard direct material cost = $\$5.4$ per pound * 8,300 pounds = $\boxed{\$44,920}$
Final Answer
\frac{\$25,344 - \$20,640}{14} = \boxed{\$4,704} unfavorable
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