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Accounting: Tools for Business Decision Making

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Chapter 22 Sample Problem: Smitty Company set the following standard unit costs for its single product: Direct material (20 lbs. @ $2 per lb.) $ 40.00 Direct labor (4 hrs. @ $11 per hr.) 44.00 During the current quarter, the company produced 80,000 units of product;  actual direct labor totaled 300,000 hours.  Actual costs incurred during the current quarter follow:
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Unformatted text preview: Direct materials (1,580,000 lbs. @ $2.20) $ 3,476,000 Direct labor (300,000 hrs. @ $11.50) 3,450,000 Required 1. Compute the direct materials price and quantity variances. 2. Compute the direct labor rate and efficiency variances. 3. Explain what each of the above variances imply....
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