# Cost of direct material purchases 432000 actual

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Cost of direct material purchases \$432,000 Actual direct manufacturing labour-hours 41,000 hours Actual direct labour cost \$594,500 Direct materials efficiency variance \$ 1,700 There were not beginning inventories. Required: 1. Compute direct manufacturing labor variances for July. 2. Compute the actual pounds of direct materials used in production in July. 3. Calculate the actual price per pound of direct materials purchased. 4. Calculate the direct materials price variance.
ACCT2112Additional Questions Chp#7Page 3 Suggested Solutions to: Qn 7-31 DMFramesActual ounces used = 4.00 per unit × 7,300 units = 29,200 oz. Price per oz. = \$70,08029,200 = \$2.40 DMLensesActual ounces used = 6.00 per unit × 7,300 units = 43,800 oz. Price per oz. = \$131,400 43,800 = \$3.00 Direct LaborActual labor hours = \$145,12414.20 = 10,220 hours Labor hours per unit = 10,2207,300 units = 1.40 hours per unit Actual Costs Incurred (Actual Input Qty. ×Actual Price) (1) Actual Input Qty. ×Budgeted Price (2) Flexible Budget (Budgeted Input Qty. Allowed for Actual Output ×Budgeted Price) (3) Direct Materials: Frames (7,300 × 4× \$2.40) \$70,080 (7,300 × 4 × \$2.30) \$67,160 (7,300 × 2.00 × \$2.30) \$33,580 \$2,920 U \$33,580 U Price variance Efficiency variance Direct Materials: Lenses (7,300 × 6.0 × \$3.00) \$131,400 (7,300 × 6.0 × \$3.10) \$135,780 (7,300 × 4.00 × \$3.10) \$90,520 \$4,380 F \$45,260 U Price variance Efficiency variance Direct Manuf. Labor (7,300 × 1.40 × \$14.20) \$145,124 (7,300× 1.40 × \$18.00) \$183,960 (7,300 × 1.00 × \$18.00) \$131,400 \$38,836 F \$52,560 U Price variance Efficiency variance
ACCT2112Additional Questions Chp#7Page 4 Additional Information to answer “text questions of Qn 7-31Actual selling price = \$79.00 Budgeted selling price = \$78.00 Actual sales volume = 7,300 units Development of Flexible Budget Budgeted Unit Amounts Actual Volume Flexible Budget Amount Revenues \$78.00 7,300 \$569,400 Variable costs DMFrames \$2.30/oz. × 2.00 oz. 4.60a 7,300 33,580 DMLenses \$3.10/oz. × 4.00 oz. 12.40b 7,300 90,520 Direct manuf. labor \$18.00/hr. × 1.00 hrs. 18.00c 7,300 131,400 Total variable manufacturing costs 255,500 Fixed manufacturing costs 114,000 Total manufacturing costs 369,500 Gross margin \$199,900 a\$35,880 ÷ 7,800 units;b\$96,720 ÷ 7,800 units;c\$140,400 ÷ 7,800 units Actual Results (1) Flexible- Budget Variances (2) = (1) (3) Flexible Budget (3) Sales - Volume Variance (4) = (3) (5) Static Budget (5) Units sold 7,300 7,300 7,800 Revenues \$576,700 \$ 7,300 F \$569,400 \$ 39,000 U \$608,400
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