Answer:
Instructions are below.
Explanation:
Giving the following information:
Direct labor:
Actual labor rate $15 per hour
Standard labor rate $14.50 per hour
Actual hours incurred and used 3,500 hours
Standard hours used 3,550 hours
Direct material:
Actual quantity of materials purchased and used 1,500 tons
Standard quantity of materials used 1,480 tons
Actual materials price $220 per ton
Standard materials price $224 per ton
To calculate the direct labor efficiency and rate variance, we need to use the following formulas:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Direct labor time (efficiency) variance= (3,550 - 3,500)14.5
Direct labor time (efficiency) variance= $725 favorable
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Direct labor rate variance= (14.5 - 15)*3,500
Direct labor rate variance= $1,750 unfavorable
To calculate the direct material rate and quantity variance, we need to use the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
Direct material price variance= (224 - 220)*1,500
Direct material price variance= $6,000 favorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (1,480 - 1,500)*220
Direct material quantity variance= $4,400 unfavorable
