Chapter 11, Problem 11.8E

The following direct materials and direct labor data pertain to the operations of Laurel Company for the month of August.

Costs
Actual labor rate		$13 per hour
Actual materials price		$128 per ton
Standard labor rate		$12.50 per hour
Standard materials price		$130 per ton
Quantities
Actual hours incurred and used	4,150 hours
Actual quantity of materials purchased and used	1,220 tons
Standard hours used	4,300 hours
Standard quantity of materials used	1,200 tons

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.