Levine Inc., which produces a single product, has prepared the following standar

Question

Levine Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product. Direct materials (10 pounds at $2.70 per pound) Direct labor (6 hours at $12.00 per hour) During the month of April, the company manufactures 320 units and incurs the following actual costs. Direct materials purchased and used (1,700 pounds) Direct labor (1,940 hours) Compute the total, price, and quantity variances for materials and labor. Total materials variance Materials price variance $27.00 $72.00 $4,760 $22,892 Materials quantity variance s Total labor variance Labor price variance Labor quantity variance

Explanation / Answer

Total material variance = (320*27-4760) = 3880 Favorable

Material price variance = (2.7*1700-4760) = 170 Unfavorable

Material quantity variance = (320*10-1700)*2.7 = 4050 Favorable

Total labour variance = (320*72-22892) = 148 Favorable

Labour rate variance = (12*1940-22892) = 388 Favorable

Labour quantity variance = (320*6-1940)*12 = 240 Unfavorable

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