Question

Cinrich Band Uniforms uses a standard costing system. The standard material and labor costs for producing a marching band hat are as follows: Materials (0.90 yards x $11.50) Direct labor (1.20 hours x $13.20) $10.35 $15.84 During May, the company produced 3,520 band hats; 3,770 yards of material were purchased for $36,946, and 2,900 yards of material were used in production. Also during May, 4,300 direct labor hours were worked at a cost of $60,200. Calculate material price and quantity variances and labor rate and efficiency variances. Indicate whether the variances are favorable or unfavorable. (Round intermediate calculations to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 125. Enter all variances as a positive number.) Material Price Variance 6409 vorable Material Quantity Variance 2773.80 T Favorable Labor Rate Variance 7912 Favorable Labor Efficiency Variance 1003.20 Unfavorable

Answer 1

Material Quantity Variance= (Std Quantity- Actual Quantity)X Std Rate

((0.90X3520)-2900)X$11.50=$3082 Favourabe

Labour Rate Variance= (Std Rate-A ctual Rate)X Actual Hour

($13.20-$14)X4300=$3440 Unfavourable

Actual Rate per Hour= $60200/4300=$14

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