Question

In December, Sam Antari, president of Antari Inc., received the following information from Denise Sweet, the new controller, in regard to November production of travel bags. November production 4,800 bags Actual cost of material purchased and used $14,550 Standard material allowed 0.5 square yard per bag Material quantity variance $600 U Standard price per yard of material $6 Actual hours worked 9,760 hours Standard labor time per bag 2 hours Labor rate variance $1,464 F Standard labor rate per hour $17. Antari asked Sweet to provide the following information:

a) Actual cost per bag
b) Material price variance
c) Labor efficiency variance
d) Standard labor cost per bag

Answer 1

To answer Sam Antari's questions, Denise Sweet needs to calculate the actual cost per bag, material price variance, labor efficiency variance, and standard labor cost per bag for the production of travel bags in November.

Step-by-step explanation:

To answer the questions posed by Sam Antari, the new controller Denise Sweet needs to calculate certain variances and costs for the production of travel bags in November.

a) The actual cost per bag can be calculated by dividing the total cost of materials purchased and used by the number of bags produced. In this case, the actual cost per bag is $14,550 / 4,800 = $3.03125.

b) The material price variance can be calculated by multiplying the standard price per yard of material by the difference between the actual quantity of material used and the standard quantity allowed. In this case, the material price variance is $6 * (4,800 * 0.5 - 4,800) = $600.

c) The labor efficiency variance can be calculated by multiplying the labor rate variance by the actual hours worked. In this case, the labor efficiency variance is $1,464 * 9,760 = $14,300,640.

d) The standard labor cost per bag can be calculated by multiplying the standard labor time per bag by the standard labor rate per hour. In this case, the standard labor cost per bag is 2 * $17 = $34.