Quicksilver Compnay has set the follwoing standards for one unit of product:
Direct material
Quantity: 6.2 lbs per unit
Price per lb: $11 per lb
Direct Labor
Quantity: 6 hrs per unit
Rate per hr: $23 per hr
Actual costs incurred in the production of 2,800 units were as follows:
Direct material: $194,350 ($11.50 per lb)
Direct labor: $393,750 ($22.50 per hr)
All Materials purchased were consumed during the period.
Required:
Calculate the direct-material price and quantity variances, and the direct-labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.