Calculating Material and Labor Variances:
Star Band Uniforms uses a standard costing system. The standard material and labor costs for producing a marching band hat is as follows:
Materials (0.70 yards × $10.00) $7.00
Direct labor (0.80 hours × $12.50) $10.0
During May, the company produced 3,000 band hats; 3,500 yards of material were purchased for $31,850, and 2,600 yards of material were used in production. Also during May, 3,100 direct labor hours were worked at a cost of $41,850. Calculate material price and quantity variances and labor rate and efficiency variances. Indicate whether the variances are favorable or unfavorable. (If answer is negative, put amount in parenthesis.)
Material Price Variance $ UnfavorableorFavorable
Material Quantity Variance $ UnfavorableorFavorable
Labor Rate Variance $ FavorableorUnfavorable
Labor Efficiency Variance $ FavorableorUnfavorable