Futuristic Fabricators Inc. uses a standard cost system to account for its single product. The standards established for the product include the following:

Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 lb @ $0.50 per lb

Labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 hr @ $8.00 per hr

The following operating data came from the records for the month:

In process, beginning inventory, none.

In process, ending inventory, 800 units 80% complete as to labor; material is issued at the beginning of processing.

Completed during the month, 5,600 units.

Materials issued to production were 51,680 lb @ $0.55 per pound.

Direct labor was $304,000 at the rate of $7.60 per hour.

Required:

Calculate the following variances, using the diagram format in Figure 8-4.

1. Materials price.
2. Materials quantity.
3. Net materials variance.
4. Labor rate.
5. Labor efficiency.
6. Net laborvariance.

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Materiale Variances Actual cost (Actual quantity used X actual price per unit) Actual quantity usedX standard price per unit Equivalent production standard quantity per unit × standard price 11,000 Ibs. x $3.80 S41.800 11,000 lbs. × $4.00 = $44,000 10.000 units × 1 lb. × $4 $40,000 Materials Price Variance $2,200 F Materials Quantity Variance $4.000 U Net Matorials Variance $1.800 U Labor Variances Actual hours (Actual hours worked X actual rate per hour) Actual hours worked X standard rate per hour Equivalent production x standard hours per unit x standard rate 4,500 hrs. × $11 =$49,500 4,500 hrs. × $10= $45,000 10,000 units × 0.5 hr. × $10 = $50,000 Labor Rate Variance $4,500 U Labor Efficiency Variance $5,000 F Net Labor Variance S500 F