Calculation of Labor Variances.
1.The following direct materials and direct labor data pertain to the operations of Solario Manufacturing Company for the month of August.
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Costs
|
|
Actual labor rate
|
$18 per hour
|
|
Actual material price
|
$177 per ton
|
|
Standard labor rate
|
$17 per hour
|
|
Actual material price
|
$179 per ton
|
|
Quantities
|
|
Actual hours incurred and used
|
5,796 hours
|
|
Actual quantity of materials purchases and used
|
1,691 tons
|
|
Standard hours used
|
5,934 hours
|
|
Standard quantity of materials used
|
1,656 tons
|
Compute the total, price, and quantity variance for materials and labor.
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Total materials variance
|
$______
|
______
|
|
Materials price variance
|
$______
|
______
|
|
Materials quantity variance
|
$______
|
______
|
|
Total labor variance
|
$______
|
______
|
|
Labor price variance
|
$______
|
______
|
|
Labor quantity variance
|
$______
|
______
|
2.The following direct materials and labor data pertain to the operations of Solario Manufacturing Company for the month of August.
|
Costs
|
|
Actual labor rate
|
$13 per hour
|
|
Actual material price
|
$128 per ton
|
|
Standard labor rate
|
$12 per hour
|
|
Actual material price
|
$130 per ton
|
|
Quantities
|
|
Actual hours incurred and used
|
4,200 hours
|
|
Actual quantity of materials purchases and used
|
1,225 tons
|
|
Standard hours used
|
4,300 hours
|
|
Standard quantity of materials used
|
1,200 tons
|
Provide two possible explanations for each of the unfavorable variances calculated in 1, and suggest where responsibility for the unfavorable result might be placed (1).