The direct materials and direct labor data shown on the next page pertain to the operations of Solario Manufacturing Company for the month of August.
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Costs |
Quantities |
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|
Actual labor rate |
$13 per hour |
Actual hours incurred |
|
|
and used |
4,200 hours |
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|
Actual materials price |
$128 per ton |
Actual quantity of |
|
|
materials purchased |
|||
|
Standard labor rate |
$12 per hour |
and used |
1,225 tons |
|
Standard materials price |
$130 per ton |
Standard hours used |
4,300 hours |
|
Standard quantity of |
|||
|
materials used |
1,200 tons |
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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.