Exercise 21-15 Direct materials and direct labor variances LO P2 The following information describes production activities of Mercer Manufacturing for the year.

Actual direct materials used 16,000 lbs. at $4.05 per lb.
Actual direct labor used 5,545 hours for a total of $105,355
Actual units produced 30,000
Budgeted standards for each unit produced are 0.50 pounds of direct material at $4.00 per pound and 10 minutes of direct labor at $20 per hour.

Compute the direct materials price and quantity variances

Instructions are below.

Explanation:

Giving the following information:

Actual direct materials used 16,000 lbs. at $4.05 per lb.

Actual units produced 30,000

Budgeted standards for each unit produced are 0.50 pounds of direct material at $4.00 per pound.

To calculate the direct material price and quantity variance, we need to use the following formulas:

Direct material price variance= (standard price - actual price)*actual quantity

Direct material price variance= (4 - 4.05)*16,000

Direct material price variance= $800 unfavorable

Direct material quantity variance= (standard quantity - actual quantity)*standard price

Standard quantity= 30,000*0.5= 15,000

Direct material quantity variance= (15,000 - 16,000)*4

Direct material quantity variance= $4,000 unfavorable

Direct materials price variance = $800 Unfavorable

Direct materials quantity variance = $4,000 Unfavorable

Explanation:

Direct materials price variance = Aq×Ap-Aq×Sp

                                                   = (16,000×$4.05) - (16,000×$4.00)

                                                   = $800 Unfavorable

Direct materials quantity variance = Aq×Sp - Sq×Sp

                                               = (16,000×$4.00) - (30,000×0.50 pounds×$4.00 )

                                               = $4,000 Unfavorable

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henry is an economist and wants to understand the relationship between inflation and consumer spending habits. for his research, he needs the consumer price index for 2014 and the inflation rate. based on the prices of goods given, what will he find to be the cpi and inflation rate for 2014? assume that a consumer’s basket for three consecutive years consists of the following:

you dont privide answer choices.

answer - 15% of a inflatation rate is 15% less in cpi