The following direct materials and direct labor data pertain

The following direct materials and direct labor data pertain to the operations of Laurel Company for the month of August. (a) Compute the total, price, and quantity variances for materials and labor.

Solution

Ans) Laurel company Cost Actual Labor rate $         13.00 Per hour Actual Material Price $       220.00 Per ton Standard Labor rate $         12.50 Per hour Standard material Price $       224.00 Per ton Quantity Actual Hours used 4200 Hours Actual quantity of material purchased and used 1600 Tons Standard Hours used 4280 Hours Standard Quantity of material used 1580 Tons Variances Material Price Variance=Actual Quantity(AP-SP) $ (6,400.00) (F) Mateial Quantity Variance=SP(AQ-SQ) $   4,480.00 (A) Total Material Variance=MPV+MQV $ (1,920.00) (F) Labor Rate Variance=AH(SR-AR) $   2,100.00 (A) Labor Quantity Varance=SR(AH-SH) $ (1,000.00) (F) Total Labor Variance=LRV+LQV $   1,100.00 (A)