Nona Inc., which produces a single product, has prepared the following standard

Question

Nona Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product. Direct materials (8 pounds at $3.70 per pound) $29.60 Direct labor (4 hours at $10.00 per hour) $40.00 During the month of April, the company manufactures 300 units and incurs the following actual costs. Direct materials purchased and used (1,600 pounds) $6,272 Direct labor (1,220 hours) $12,005 Compute the total, price, and quantity variances for materials and labor.

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Total materials variance $

UnfavorableNeither favorable nor unfavorableFavorable

Materials price variance $

Neither favorable nor unfavorableUnfavorableFavorable

Materials quantity variance $

UnfavorableNeither favorable nor unfavorableFavorable

Total labor variance $

FavorableUnfavorableNeither favorable nor unfavorable

Labor price variance $

UnfavorableNeither favorable nor unfavorableFavorable

Labor quantity variance $

Neither favorable nor unfavorableUnfavorableFavorable

Explanation / Answer

workings for calculating veriances :

standred quantity of raw material required for actual production

=300units*8pounds

? =2400pounds

standred hours required for actual production=300units*4hr

? =1200hours

?stander price per unit of raw material=3.7$

?    standerd labour cost per hour=10$

(standared qty*standared price-actual cost of raw material) veriance material cost veriance 2400*3.7-6272=2608 Favourable

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