E11-6 The following direct materials and direct labor data pertain to the operations of
Batista Manufacturing Company for the month of August.
Compute the total, price, and quantity variances for materials and labor.
The following direct materials and direct labor data pertain to the operations of
Batista Manufacturing Company for the month of August.
Costs Quantities
Actual labor rate $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 materials price and
quantity variances.
(SO 4)
Compute labor price and
quantity variances.
(SO 4)
Compute labor quantity variance.
(SO 3, 4)
Compute materials and labor
variances.
(SO 4)
Compute the materials and
labor variances and list reasons
for unfavorable variances.
(SO 4, 6)
Instructions
(a) Compute the total, price, and quantity variances for materials and labor.
(b) Provide two possible explanations for each of the unfavorable variances calculated
above, and suggest where responsibility for the unfavorable result might be placed.