The following direct materials and direct labour data pertain to the operations of Engles Manufacturing Company for the month of August.
|
Costs |
Quantities |
||
|
Actual labour 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 |
1,225 tons |
|
Standard labour rate |
$12 per hour |
Standard hours used |
4,300 hours |
|
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 labour.
(b) Provide two possible explanations for each of the unfavorable variances calculated above, and suggest where responsibility for the unfavorable result might be placed.