Alameda Inc., which produces a single product, has prepared the following standa

Question

Alameda Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product. Direct materials (8 pounds at $2.75 per pound) $22 Direct labor (3 hours at $17.00 per hour) $51 During the month of April, the company manufactures 231 units and incurs the following actual costs. Direct materials purchased and used (1,930 pounds) $6,948 Direct labor (700 hours) $10,360 Compute the total, price, and quantity variances for materials and labor. (Round unit costs to 2 decimal places, e.g. 10.50 and all other computations and final answers to 0 decimal places, e.g. 125.) Total materials variance $ Materials price variance $ Materials quantity variance $ Total labor variance $ Labor price variance $ Labor quantity variance $

Explanation / Answer

DIRECT MATERIALS Actual price: 3.60 (6948/1930) Standard price: 2.75 Actual quantity: 1930 Standard quantity: 1848 Total materials variance $ 1866 Unfavorable (-1640.50-225.50) Materials price variance $ 1640.50 Unfavorable (2.75-3.60)*1930 Materials quantity variance $ 225.50 Unfavorable (1848-1930)*2.75 DIRECT LABOR Actual rate: 14.80 (10360/700) Standard rate: 17 Actual quantity: 700 Standard quantity: 693 (3*231) Total labor variance $ 1659 Unfavorable (-1540-119) Labor price variance $ 1540 Unfavorable (14.80-17.00)*700 Labor quantity variance $ 119 Unfavorable (693-700)*17

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