A firm has established standards as follows:
Direct material 3 pounds @ $4/pound = $12 per unit
Direct labor 2 hours @ $8/hour = $16 per unit
Variable overhead 2 hours @ $5/hour = $10 per unit
Actual production figures for the past year were as follows:
Units produced 500
Direct materials used 1600 pounds
Direct material purchased (1,600 pounds) $6,560
Direct labor cost (950 hours) $7790
Variable overhead cost incurred $4655
Required:
What is the materials price variance (amount and favorable or unfavorable)?
What is materials quantity variance (amount and favorable or unfavorable)?
What is the labor rate variance (amount and favorable or unfavorable)?
What is the labor efficiency variance (amount and favorable or unfavorable)?