# Variance Analysis for Materials and Labour Costs

Based on the following:

Direct materials:

Standard price per pound: $9

Actual price per pound: $8

Price variance: $20,000 F

Total of direct-material variances: $2,000 F

Direct labor:

Actual hours worked: 40,000

Actual rate per hour: $15

Efficiency variance: $28,000 F

Total of direct-labor variances: $12,000 U

Units Completed: 12,000

Compute

a. actual materials used

b. materials quantity variance

c. labor rate variance

d. standard labor rate per hour

e. standard labor time per finished unit

https://brainmass.com/business/accounting/variance-analysis-for-materials-and-labour-costs-141774

#### Solution Preview

Based on the following:

Direct materials:

Standard price per pound: $9

Actual price per pound: $8

Price variance: $20,000 F = AQ*SP - AQ*AP

Total of direct-material variances: $2,000 F

Direct labor:

Actual hours worked: 40,000

Actual rate per hour: $15

Efficiency variance: $28,000 F

Total of direct-labor variances: $12,000 ...

#### Solution Summary

The solution computes the labour and material costs.