Question

Exercise 24-07 (Video) Levine Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product. $20 Direct materials (8 pounds at $2.50 per pound) Direct labor (3 hours at $12.00 per hour) $36 During the month of April, the company manufactures 230 units and incurs the following actual costs. Direct materials purchased and used (1,900 pounds) Direct labor (700 hours) $5,035 $8,120 Compute the total, price, and quantity variances for materials and labor. Total materials variance ___ + Materials price variance Materials quantity variance Total labor variance Labor price variance + Labor quantity variance +

Answer 1

Total materials variancez-$435 Unfavourable material price variance= - $295 unfavourable material quantity variance = (-$ 150 unfavourable Total labour variance = $160 favourable] Labour price variance = ($280 favourable Labour quantity variance = -$2oluntavourable

competation of variances Total material variance ! = (standard quantity & standard price] Lactual quantity & Actual price ] [230 x 8 pocends x $2.5] [1900 x $2.657 E $4600 - $5035 - - $435 Unfavourable material price variance: Actual Quantity & standard price] Lactual quantity & actual price ? s | 1900 x$2153 - [ 1900 x $2657 < $4750 - 3 5835 = -285 unfavourable

materials quartety Veriance = [standard quantity & standard price] (Actreal quantity & standard price [1840x $2'5] - [1900x $ 25 E $4600 - $50354750 = - $150 unfavourable Total Labour variance. = (standard bours a standard rate ! Actual hours Actual rate = L Shours X230 UX $120 1 7oo x $116 = $ 8280 - $8120 = $ 160 favourable

Labour price variance = Lactual beurst standard rate] (actual hours & Actual rate = 700x $12 ]-[700 x $11.6] = $8400 - $8120 = $280 favourable Labour Quantity variance [standard hours standard rotel [Actual hours standard rate = 690 * $12 3-[700 x $12 = $8280 - $8400 - $120 osfavourable