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		$180	per ton
Standard labor rate		$14.50	per hour
Standard materials price		$182	per ton

Quantities
Actual hours incurred and used		4,700 hours
Actual quantity of materials purchased and used		1,900 tons
Standard hours used		4,760 hours
Standard quantity of materials used		1,890 tons

(a)

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

Total materials variance		$enter a dollar amount		select a type of the variance                                                          FavorableNeither favorable nor unfavorableUnfavorable
Materials price variance		$enter a dollar amount		select a type of the variance                                                          Neither favorable nor unfavorableUnfavorableFavorable
Materials quantity variance		$enter a dollar amount		select a type of the variance                                                          Neither favorable nor unfavorableFavorableUnfavorable
Total labor variance		$enter a dollar amount		select a type of the variance                                                          Neither favorable nor unfavorableUnfavorableFavorable
Labor price variance		$enter a dollar amount		select a type of the variance                                                          UnfavorableNeither favorable nor unfavorableFavorable
Labor quantity variance		$enter a dollar amount		select a type of the variance                                                          UnfavorableFavorableNeither favorable nor unfavorable

Answer 1

Variance Analysis Data Standard Price SP 182 Per ton Standard Quantity for Actual Output SQ 1890 Tonns Actual Quanity Used AQ 1900 Tonns Actual Price of Material AP 180 Per ton Standard Rate= SR 14.50 Per hour Standard Hours for Actual output SH 4760 Hours Actual hours Worked AH 4700 hours Actual Rate = AR 15.00 Per hour Answers Total Material Variance 1980 Favorable Mateial Price Variance (SP-AP)* AQ purchased = (182-180)*1900 3800 Favorable Matrial Quanity Varaince (SQ-AQ)*SP=(1900-1890)-182 1820 Unfavorable Labor Variance Total labor Variance 1480 Unfavorable Labour Price Varaince (SR-AR)*AH=(14.50-15.00)*4700 2350 Unfavorable Labour Quantity Varaince (SH-AH) *SR=(4760-4700) *14.50 870 Favorable