Question

Sail Away produces boats and uses a standard cost system for material (fiberglass and paint) and labor. Standard costs and quantities for materials and labor for one boat follow.
1,600 pounds of fiberglass @ $4.25 per pound........................... $6,800.00
3 quarts waterproof paint @ $25 per gallon................................ 18.75
50 hours of labor @ $15 per hour................................................ 750.00
In June 2009, Sail Away’s actual data for the production of 150 boats were as follows:
Fiberglass........................... 245,000 pounds purchased and used @ $4.65 per pound
Paint....................................................................... 115 gallons @ $23.50 per gallon
Direct labor........................................................ 7, 250 hours @ $16 per hour
Required:
(a) Calculate the material and labor variances for Sail Away for June 2009.
(b) Provide some possible reasons for each of the variances.


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  • CreatedMarch 27, 2015
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