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NOREEN MANAGERIAL ACCOUNTING FOR MANAGERS 2E Practice Exam – Chapter 10 Print these pages. Answer each of the following questions, explaining your answers or showing your work, as appropriate, and then compare your solutions to those provided at the end of the practice exam. 1. Preston Company employs a standard cost system in which direct materials inventory is carried at standard cost. The company has established the following standards for the prime costs of one unit of product: Standard Quantity Standard Price Standard Cost Direct labor 2.3 hours $44.00/hour $101.20 Direct materials 11.0 pounds $14.00/pound 154.00 During April, the company purchased 310,000 pounds of direct material at a total cost of $4,386,500. The total factory wages for April were $2,892,500, of which 90% was for direct labor. The company manufactured 26,000 units of product during April using 289,000 pounds of direct material and 58,500 direct labor hours. (a) Calculate the price variance for the direct material purchased in April. (b) Calculate the direct material quantity variance for April. (c) Calculate the direct labor rate variance for April.
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(d) Calculate the direct labor efficiency variance for April.
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