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    Variance Analysis for Materials and Labour Costs

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    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

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    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.

    $2.49

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