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 $184 per ton Quantities Actual hours incurred and used 4,000 hours Actual quantity of materials purchased and used 1,300 tons Standard hours used 4,090 hours Standard quantity of materials used 1,290 tons (a) Compute the total, price, and quantity variances for materials and labor. Total materials variance $ Materials price variance $ Materials quantity variance $ Total labor variance $ Labor price variance $ Labor quantity variance $

Question

Cierra

Business

1 June, 20:54

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 $184 per ton Quantities Actual hours incurred and used 4,000 hours Actual quantity of materials purchased and used 1,300 tons Standard hours used 4,090 hours Standard quantity of materials used 1,290 tons (a) Compute the total, price, and quantity variances for materials and labor. Total materials variance $ Materials price variance $ Materials quantity variance $ Total labor variance $ Labor price variance $ Labor quantity variance $

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Luci · Answer 1

Total material variance = $3,360 F

Materials price variance = $5,200 F

Material quantity variance = $1,840 U

Total labor variance = $695 U

Labor price variance = $2,000 U

Labor quantity variance = $1,305 F

Explanation:

As per the data given in the question,

Total material variance = (1300 * $180) - (1,290 * $184)

= $3,360 F

Materials price variance = 1,300 ($180-$184)

= $5,200 F

Material quantity variance = $184 * (1,300-1,290)

= $1,840 U

Total labor variance = (4,000 hours*$15) - (4,090*$14.50)

= $695 U

Labor price variance = 4,000 * ($15 - $14.50)

= $2,000 U

Labor quantity variance = $14.5 * (4,000 - 4,090)

= $1,305 F