Exercise 24-08 a The following direct materials and direct labor data pertain to the operations of Skysong Company for the month of August. Costs Actual labor rate $15 per hour Actual materials price $190 per ton Standard labor rate $14.50 per hour Standard materials price $193 per ton Quantities Actual hours incurred and used 4,600 hours Actual quantity of materials purchased and used 1,700 tons Standard hours used 4,650 hours Standard quantity of materials used 1,680 tons (a) Compute the total, price, and quantity variances for materials and labor

Total materials variance =  $1,240 favorable

Materials price variance =  $5,100 favorable

Materials quantity variance = $3,860 unfavorable

Total labor variance = $1,575 unfavorable

Labor price variance = $2,300 unfavorable

labor quantity variance = $725 favorable

Explanation:

Materials Variances

Total materials variance = Standard Cost - Actual Cost

                                        = ($193 x 1,680) - ($190 x 1,700)

                                        = $324,240 - $323,000

                                        = $1,240 favorable

Materials price variance = (Standard Price - Actual Price) x Actual Quantity

                                        = ($193 - $190) x 1,700

                                        = $5,100 favorable

Materials quantity variance =  (Standard Quantity - Actual Quantity) x Standard Price

                                             = (1,680 - 1,700) x $193

                                             = $3,860 unfavorable

Labor Variances

Total labor variance = Standard Cost - Actual Cost

                                  = ($14.50 x 4,650) - ($15 x 4,600)

                                  = $67,425 - $69,000

                                  = $1,575 unfavorable

Labor price variance = (Standard rate- Actual rate) x Actual hours

                                   = ($14.50 x $15) x 4,600

                                   = $2,300 unfavorable

labor quantity variance =  (Standard hours - Actual hours ) x Standard rate

                                       = (4,650 - 4,600) x $14.50

                                       = $725 favorable

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