Calculation of Labor Variances.
The following direct materials and labor data pertain to the operations of Solario Manufacturing Company for the month of August.
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Costs
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Actual labor rate
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$13 per hour
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Actual material price
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$128 per ton
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Standard labor rate
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$12 per hour
|
|
Actual material price
|
$130 per ton
|
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Quantities
|
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Actual hours incurred and used
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4,200 hours
|
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Actual quantity of materials purchases and used
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1,225 tons
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Standard hours used
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4,300 hours
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|
Standard quantity of materials used
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1,200 tons
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Instructions:
Provide two possible explanations for each of the unfavorable variances calculated in E25-8 (a), and suggest where responsibility for the unfavorable result might be placed. Refer to E25-8 (a).