The following direct materials and direct labor data pertain to the operations o
ID: 2454267 • Letter: T
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 $13 per hour Actual materials price $117 per ton Standard labor rate $12 per hour Standard materials price $119 per ton Quantities Actual hours incurred and used 4,880 hours Actual quantity of materials purchased and used 1,865 tons Standard hours used 4,928 hours Standard quantity of materials used 1,847 tons
Compute the total, price, and quantity variances for materials and labor.
Explanation / Answer
A) Total Materials variance = ( Actual price*Actual Quantity - Standard Price*Standard Quantity)
Total Materials variance = (117*1865 - 119*1847)
Total Materials variance = $ 1588 favorable
B) Materials price variance = (Actual price - Standard Price) *Actual Quantity
Materials price variance = (117-119)*1865
Materials price variance = $ 3730 Favorable
C). Materials usage/quantity variance = (Actual Quantity Used- Standard Quantity)Standard Price
Materials usage/quantity variance = (1865-1847)*119
Materials usage/quantity variance = $ 2142 Unfavorable
D) Total Labor variance = (Actual Rate*Actual Hour - Standard Rate* Standard Hour)
Total Labor variance = (13*4880-12*4928)
Total Labor variance = $ 4304 Unfavorable
E) Labor price variance = (Actual Rate-Standard Rate)*Actual Hour
Labor price variance = (13-12)*4880
Labor price variance = $ 4880 Unfavorable
F) Labor Quantity variance = (Actual Hour - Standard Hour)Standard Rate
Labor Quantity variance = (4880-4928)*12
Labor Quantity variance = 576 Favorable
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