Chapter 11, Problem 11.13E

Ceelo Company purchased (at a cost of $10,200) and used 2,400 pounds of materials during May. Ceelos standard cost of materials per unit produced is based on 2 pounds per unit at a cost $5 per pound. Production in May was 1,050 units.

Instructions

(a) Compute the total, price, and quantity variances for materials.

(b) Assume Ceelo also had an unfavorable labor quantity variance. What is a possible scenario that would provide one cause for the variances computed in (a) and the unfavorable labor quantity variance?