Levine Inc., which produces a single product, has prepared the following standar

Question

Levine Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product. Direct materials (10 pounds at $2.90 per pound) $29.00 Direct labor (3 hours at $13.00 per hour) $39.00 During the month of April, the company manufactures 350 units and incurs the following actual costs. Direct materials purchased and used (2,100 pounds) $6,510 Direct labor (1,080 hours) $13,932 Compute the total, price, and quantity variances for materials and labor.

Total materials variance $ UnfavorableNeither favorable nor unfavorableFavorable

Materials price variance $ FavorableNeither favorable nor unfavorableUnfavorable

Materials quantity variance $ UnfavorableNeither favorable nor unfavorableFavorable

Total labor variance $ UnfavorableNeither favorable nor unfavorableFavorable

Labor price variance $ FavorableUnfavorableNeither favorable nor unfavorable

Labor quantity variance $ Neither favorable nor unfavorableFavorableUnfavorable

Explanation / Answer

Material Price Variance ( Standard Price- Actual Price)* Actual Quantity (2.90-6510/2100)2100 (2.90-3.10)*2100 420 Unfavourable Material Quantiy Variance ( Standard Quantity- Actual Quantity) Std Price per KG (350*10-2100)2.90 1400*2.9 $ 4172 Favourable Labour Rate Variance = ( Standard Price- Actual Price) Actual Hours ( 13-13932/1080)1080 (13-12.9)1080 108 Favourable Labour Efficiency Variance = ( Standard Hours- Actual Hours) Stndard price per hour ( 350*3-1080) 13 390 Unfavourable

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