Aquatica uses a standard cost system for materials and labor in producing small fishing boats. Production requires three materials: fiberglass, paint, and a purchased trim package. The standard costs and quantities for materials and labor are as follows:
Standards for One Fishing Boat
2,000 pounds of fiberglass ×$1.80 per pound ..... $3,600
6 quarts gel coat paint×$15.00 per quart ........ 90
1 trim package ................... 200
40 hours of labor×$25.00 per hour ......... 1,000
Standard cost for DM and DL ......... $4,890
The following actual data related to the production of 600 boats was recorded for July:
Material Purchased on Account
Fiberglass—2,100,000 pounds ×$1.83 per pound
Paint—1,000 gallons ×$55.50 per gallon
Trim packages—640 × $205 per package
Material Used
Fiberglass—1,380,000 pounds
Paint—924 gallons
Trim packages—608
Direct Labor Used
23,850 hours × $23.50 per hour
Calculate the material and labor variances for Aquatica for July. The material price variance should be computed for each type of material and on the quantity of material purchased.