Question

The following direct materials and direct labor data pertain to the operations of Laurel Company for the month of August. Costs Actual labor rate $15 per hour Actual materials price $260 per ton Standard labor rate $14.50 per hour Standard materials price $262 per ton Quantities Actual hours incurred and used 4,100 hours Actual quantity of materials purchased and used 1,500 tons Standard hours used 4,190 hours Standard quantity of materials used 1,485 tons (a) Compute the total, price, and quantity variances for materials and labor.

Total materials variance $enter a dollar amount select an option

Materials price variance $enter a dollar amount select an option

Materials quantity variance $enter a dollar amount select an option

Total labor variance $enter a dollar amount select an option

Labor price variance $enter a dollar amount select an option

Labor quantity variance $enter a dollar amount select an option

Answer 1

Total materials variance = (Actual quantity * Actual price) - (Standard quantity * Standard price)

= (1,500 * $260) - (1,485 * $262)

= $390,000 - $389,070

= $930 Unfavorable

Materials price variance = (Actual quantity * Actual price) - (Actual quantity * Standard price)

= (1,500 * $260) - (1,500 * $262)

= $390,000 - $393,000

= 3,000 Favorable

Materials quantity variance = (Actual quantity * Standard price) - (Standard quantity * Standard price)

= (1,500 * $262) - (1,485 * $262)

= $393,000 - $389,070

= $3,930 Unfavorable

Total labor variance = (Actual hours * Actual rate) - (Standard hours * Standard rate)

= (4,100 * $15) - (4,190 * $14.5)

= $61,500 - $60,755

= $745 Unfavorable

Labor rate variance = (Actual hours * Actual rate) - (Actual hours * Standard rate)

= (4,100 * $15) - (4,100 * $14.5)

= $61,500 - $59,450

= $2,050 Unfavorable

Labor efficiency variance = (Actual hours * Standard rate) - (Standard hours * Standard rate)

= (4,100 * $14.5) - (4,190 * $14.5)

= $59,450 - $60,755

= $1,305 Favorable