Exercise 11-7 Levine Inc., which produces a single product, has prepared the fol

Question

Exercise 11-7 Levine Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product. Direct materials (9 pounds at $2.20 per pound) Direct labor (1 hours at $11.00 per hour) During the month of April, the company manufactures 310 units and incurs the following actual costs. Direct materials purchased and used (1,600 pounds) Direct labor (330 hours) Compute the total, price, and quantity variances for materials and labor. $19.80 $11.00 $3,680 $3,564 Total materials variance Materials price variance Materials quantity variance s Total labor variance Labor price variance Labor quantity variance

Explanation / Answer

Total material variance = (310*19.80)-3680 = 2458 Favorable

Material price variance = (2.2*1600-3680) = 160 Unfavorable

Material quantity variance = (310*9-1600)*2.2 = 2618 Favorable

Total labour variance = (310*11)-3564 = 154 Unfavorable

Labour rate variance = (11*330-3564) = 66 Favorable

Labour efficiency variance = (310-330)*11 = 220 Unfavorable

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