Variance analysis, materials and labor
Response to the following problem:
Pharout Company uses a standard cost system. Job 822 is for the manufacturing of 500 units of the product P521. The company's standards for one unit of product P521 are as follows:
QUANTITY PRICE
Direct material 5 ounces $2 per ounce
Direct labor 2 hours $10 per hour
The job required 2,800 ounces of raw material costing $5,880. An unfavorable labor rate variance of $250 and a favorable labor efficiency variance of $100 also were determined for this job.
Required:
(a) Determine the direct material price variance for job 822 based on the actual quantity of materials used.
(b) Determine the direct material quantity variance for job 822 based on the actual quantity of materials used.
(c) Determine the actual quantity of direct labor hours used on job 822.
(d) Determine the actual labor costs incurred for job822.