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# Question 5: Rompola Corporation manufactures futons with the following standard costs per unit: Direct materials 80 yards @ \$2.

Question 5: Rompola Corporation manufactures futons with the following standard costs per unit:

Direct materials 80 yards @ \$2.00 per yard

Direct labor 20 hours @ \$20.00 per hour

The actual results for the year were as follows:

Direct materials 120,000 yards purchased at a cost of \$264,000; 118,000 yards used

Direct labor 32,000 hours worked at a total cost of \$604,800

Production 1,500 units

Compute the following variances:

1. Direct materials price variance

2. Direct materials usage variance

3. Direct materials inventory variance

4. Direct labor price variance

5. Direct labor usage variance

SOLUTION:
1) Actual Price = \$264,000 / 120,000 yard
Actual Price \$2.20 Direct Material Price Variance = (Standard Price - Actual Price) * Actual Quantity purchased
Direct Material Price Variance =...

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