Question 1. Explain the similarities and differences between standards and budgets. Contrast the accounting for standards and budgets.
Question 2. In the direct labor variance matrix, there are three factors: (1) Actual hours Actual rate, (2) Actual hours Standard rate, and (3) Standard hours Standard rate. Using the numbers, indicate the formulas for wach of the direct labor variances.
Question 3. The following direct materials and direct labor data pertain to the operations of Batista manufacturing Company for the month of August.
Cost Quantities:
Actual Labor $13 per hour Actual hours incurred and used 4,250 hours
Actual materials price $128 per ton Actual quantity of materials purchased and used 1,250 tons
Standard Labor rate $12 per hour Standard hours used 4,300 hours
Standard materials price $130 per ton Standard quantity of materials used 1,200 tons
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.