Explore BrainMass
Share

Explore BrainMass

    Total, price, and quantity variances for materials and labor

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    E8-5 The following direct materials and direct labor data pertain to the operations of
    Juan Manufacturing Company for the month of August.

    Costs Quantities
    Actual labor rate $13.00 per hour Actual hours Incurred 4,200 hours
    and used
    Actual materials $128 per ton Actual quantity of materials 1,230 tons
    price purchases and used

    Standard labor rate $12.00 per hour Standard hours used 4,300 hours

    Standard materials $130.00 per ton Standard Quantity of 1,200 tons
    price materials used

    Instructions
    Compute the total, price, and quantity variances for materials and labor.
    Provide two possible explanations for each of the unfavorable variances
    calculated above, and suggest where responsibility for the unfavorable result
    might be placed.
    Compute the materials and labor variances and list reasons for unfavorable variances.
    Objective 4 Study Objective 6)

    Excel Template

    (a) Total materials variance:
    $157,440 -$156,000 = $x,440 U
    (1,xxx X $xxx) (1,xxx X $xxx)

    Materials price variance:
    $157,440 - $159,900
    (1,xxx X $xxx) (1,xxx X $xxx) = $x,460 F

    Materials quantity variance:
    $159,900 - $156,000
    (1,xxx X $xxx) (1,200 ( X $130) = $x,900 U

    Total labor variance:
    $54,xxx - $xx,600
    (x,200 X $xx) (x,300 X $xx) = $x,000 U

    Labor price variance:
    $xx,600 - $xx,400
    (x,x00 X $xx) (x,x00 X $xx) = $x,200 U

    Labor quantity variance:
    $xx,400 - $xx,600
    (x,200 X $xx) (x,300 X $xx)= $x,x00 F

    © BrainMass Inc. brainmass.com October 9, 2019, 4:51 pm ad1c9bdddf
    https://brainmass.com/business/labour-management-and-relations/total-price-and-quantity-variances-for-materials-and-labor-42437

    Attachments

    Solution Preview

    E8-5 The following direct materials and direct labor data pertain to the operations of
    Juan Manufacturing Company for the month of August.

    Costs Quantities
    Actual labor rate $13.00 per hour Actual hours Incurred 4,200 hours
    and used
    Actual materials $128 per ton Actual quantity of materials 1,230 tons
    price ...

    Solution Summary

    This explains the total, price, and quantity variances for materials and labor with examples

    $2.19