The following information pertains to the standard costs and actual activity for

ID: 2551405 • Letter: T

Question

The following information pertains to the standard costs and actual activity for Tyler Company for September:

Direct materials 4 units of material A × $2.00 per unit

1 unit of material B × $3.00 per unit

Direct labor 3 hours × $8.00 per hour

Activity for September

Materials purchased

Material A 3,400 units × $2.05 per unit

Material B 800 units × $3.10 per unit

Materials used

Material A 3,050 units

Material B 705 units

Direct labor used 2,050 hours × $8.30 per hour

Production output 700 units

There were no beginning direct materials inventories.

(a) Determine the materials price and quantity variances.

(b) Determine the labor rate and efficiency variances.

a) Material price and quantity variance :

Material price A Variance = (2-2.05)*3400 = 170 U

Material quantity variance = (700*4-3050)*2 = 500 U

Material price B Variance = (3-3.10)*800 = 80 U

Material quantity variance = (700*1-705)*3 = 15 U

2) Direct labour rate variance = (8-8.30)*2050 = 615 U

Direct labour efficiency variance = (700*3-2050)*8 = 400 F

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