(Material and labor variances) Mississippi Marine uses a standard cost system for materials and labor in producing fishing boats. Production requires three materials: fiberglass, paint, and a prepurchased trim package. The standard costs and quantities for materials and labor are as follows:
|
Standards for 1 Fishing Boat |
|
|
2,500 pounds of fiberglass @ $0.80 per pound |
$2,000 |
|
6 quarts gel coat paint @ $60.00 per gallon |
90 |
|
1 trim package |
400 |
|
40 hours of labor @ $25.00 per hour |
1,000 |
|
Prime standard cost |
$3,490 |
During July 2001, the company recorded the following actual data related to the production of 300 boats: Material Purchased: Fiberglass—820,000 pounds @ $0.83 per pound Paint—500 gallons @ $55.50 per gallon Trim packages—320 @ $405 per package Material Used: Fiberglass—790,000 pounds Paint—462 gallons Trim packages—304 Direct Labor Used: 12,100 hours @ $23.50 per hour
Calculate the material and labor variances for Mississippi Marine for July 2001. Base the material price variance on the quantity of material purchased.