Exercise 15-8 Costs Quantities Open Show Work Exercise 15-8 The following direct

Question

Exercise 15-8

Costs

Quantities

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Exercise 15-8

The following direct materials and direct labor data pertain to the operations of Sheffield Company for the month of August.

Costs

Actual labor rate $16 per hour Actual materials price $190 per ton Standard labor rate $15.50 per hour Standard materials price $192 per ton

Quantities

Actual hours incurred and used 4,000 hours Actual quantity of materials purchased and used 1,400 tons Standard hours used 4,070 hours Standard quantity of materials used 1,390 tons
(a)

Compute the total, price, and quantity variances for materials and labor.
Total materials variance $

UnfavorableNeither favorable nor unfavorableFavorable

Materials price variance $

FavorableUnfavorableNeither favorable nor unfavorable

Materials quantity variance $

UnfavorableFavorableNeither favorable nor unfavorable

Total labor variance $

UnfavorableFavorableNeither favorable nor unfavorable

Labor price variance $

UnfavorableFavorableNeither favorable nor unfavorable

Labor quantity variance $

FavorableUnfavorableNeither favorable nor unfavorable

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Explanation / Answer

Total Material Variance = (SQ * SP) - (AQ * AP) (1390 * 192) - (1400 * 190) 266880 - 266000 880F Material Price Variance     =   (SP - AP) * AQ (192 - 190) * 1400 2 * 1400 2800F Material Quantity Variance     =   SP * (SQ - AQ) 192 * (1390 - 1400) 192* (10) 1920U Total Direct Labor Variance = (SR * SH) - (AR * AH) (15.50 * 4070) - (16 * 4000) 63085 - 64000 915U Labor price Variance = (SR - AR) * AH (15.50 - 16) * 4000 (0.50) * 4000 2000U Labor Quantity Variance = SR * (SH - AH) 15.50 * (4070 - 4000) 15.50 * 70 1085F *Total Material Variance can also be calculated by the total of Material Price Variance and Material Quantity Variance. 2800F + 1920U 880F *Total Labor Variance can also be calculated by the total of Labor Price Variance and Labor Quantity Variance. 2000U + 1085F 915U

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