Riggins, Inc. manufactures one product called tybos. The company uses a standard cost system and sells each tybo for $8. At the start of monthly production, Riggins estimated 6,400 tybos would be produced in March. Riggins has established the following material and labor standards to produce one tybo: Standard Quantity Standard Price Direct materials 2.5 pounds $3 per pound Direct labor 0.6 hours $10 per hour During March 2012, the following activity was recorded by the company relating to the production of tybos:
1. The company produced 6,000 units during the month.
2. A total of 16,000 pounds of materials were purchased at a cost of $44,000.
3. A total of 16,000 pounds of materials were used in production.
4. 3,200 hours of labor were incurred during the month at a total wage cost of $35,200.
Instructions Calculate the following variances for March for Riggins, Inc.
(a) Materials price variance
(b) Materials quantity variance
(c) Labor price variance
(d) Labor quantity variance