Levine Inc., which produces a single product, has prepared the following standar
ID: 2533891 • Letter: L
Question
Levine Inc., which produces a single product, has prepared the following standard cost sheet for one unit of the product.
During the month of April, the company manufactures 270 units and incurs the following actual costs.
Compute the total, price, and quantity variances for materials and labor.
$$$ F, UF, Neither
Total Materials Variance
Materials Price Variance
Materials Quantity Variance
Total Labor Variance
Labor Price Variance
Labor Quantity Variance
Direct materials (8 pounds at $3.90 per pound) $31.20 Direct labor (5 hours at $14.00 per hour) $70.00Explanation / Answer
Answers
Actual DATA for
270
units
Quantity (AQ)
Rate (AR)
Actual Cost
Direct Material
1500
$ 4.100
$ 6,150.00
Direct labor
1370
$ 13.90
$ 19,043.00
Standard DATA for
270
units
Quantity (SQ)
Rate (SR)
Standard Cost
Direct Material
2160
$ 3.90
$ 8,424.00
Direct labor
1350
$ 14.00
$ 18,900.00
Material Price Variance
(
Standard Rate
-
Actual Rate
)
x
Actual Quantity
(
$ 3.90
-
$ 4.10
)
x
1500
-300
Variance
300
Unfavourable-U
Material Quantity Variance
(
Standard Quantity
-
Actual Quantity
)
x
Standard Rate
(
2160
-
1500
)
x
$ 3.90
2574
Variance
2574
Favourable-F
Material Spending Variance
(
Standard Cost
-
Actual Cost
)
(
$ 8,424.00
-
$ 6,150.00
)
2274
Variance
2274
Favourable-F
Labor Rate Variance
(
Standard Rate
-
Actual Rate
)
x
Actual Labor Hours
(
$ 14.00
-
$ 13.90
)
x
1370
137
Variance
137
Favourable-F
Labour Efficiency Variance
(
Standard Hours
-
Actual Hours
)
x
Standard Rate
(
1350
-
1370
)
x
$ 14.00
-280
Variance
280
Unfavourable-U
Labor Spending Variance
(
Standard Cost
-
Actual Cost
)
(
$ 18,900.00
-
$ 19,043.00
)
-143
Variance
143
Unfavourable-U
Actual DATA for
270
units
Quantity (AQ)
Rate (AR)
Actual Cost
Direct Material
1500
$ 4.100
$ 6,150.00
Direct labor
1370
$ 13.90
$ 19,043.00
Standard DATA for
270
units
Quantity (SQ)
Rate (SR)
Standard Cost
Direct Material
2160
$ 3.90
$ 8,424.00
Direct labor
1350
$ 14.00
$ 18,900.00
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