The direct materials and direct labor data shown below pertain to the operations of Viet Manufacturing Company for the month of August.
|
Costs |
Quantities |
||
|
Actual labor rate |
$13 per hour |
Actual hours incurred |
|
|
and used |
4,200 hours |
||
|
Actual materials price |
$128 per ton |
Actual quantity of |
|
|
materials purchased |
|||
|
and used |
1,200 tons |
||
|
Standard labor rate |
$12 per hour |
Standard hours used |
1,200 tons |
|
Standard materials price |
$130 per ton |
Standard quantity of |
|
|
materials used |
1,200 tons |
Instructions
(a) Compute the total, price, and quantity variances for materials and labor.
(b) Provide two possible explanations for each of the unfavorable variances calculated above, and suggest where responsibility for the unfavorable result might be placed.