Neither favorable nor unfavorable/ Favorable/ Unfavorable for each. The followin
ID: 2592845 • Letter: N
Question
Neither favorable nor unfavorable/ Favorable/ Unfavorable for each.
The following direct materials and direct labor data pertain to the operations of Laurel Company for the month of August. Costs Actual labor rate Actual materials price Standard labor rate Standard materials price $13 per hour $128 per ton $12.50 per hour $130 per ton Quantities Actual hours incurred and used Actual quantity of materials purchased and used Standard hours used Standard quantity of materials used 4,150 hours 1,220 tons 4,300 hours 1,200 tons Compute the total, price, and quantity variances for materials and labor. Total materials variance Materials price variance Materials quantity variance Total labor varianceExplanation / Answer
Total material variance = Standard cost-actual cost
= (1200*130)-(1220*128)
Total material variance = 160 Unfavourable
Material price variance = (Standard price-actual price)actual quality
= (130-128)*1220
Material price variance = 2440 Favourable
Material quantity variance = (Standard quantity-actual quantity)standard price
= (1200-1220)130
Material quantity variance = 2600 Unfavourable
Total Labour variance = Standard cost-actual cost
= (4300*12.50)-(4150*13)
Total labour variance = 200 Unfavourable
labour price variance = (Standard price-actual price)actual hours
= (12.50-13)*4150
Labour price variance = 2075 Unavourable
Labour quantity variance = (Standard hours-actual hours)standard price
= (4300-4150)12.50
Labour quantity variance = 1875 favourable
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