Question: Mayhem Manufacturing provides the following standard cost data for one of its products: Direct materials. . . . . . . . . . .

Mayhem Manufacturing provides the following standard cost data for one of its products:

Direct materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 feet at $3.15 per foot

Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 hours at $12.55 per hour

During the month of February, the following actual cost data were accumulated:

Materials purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125,000 feet at $3.00 per foot

Materials used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122,000 feet

Direct labor incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,000 hours at a total cost of $215,560

Units produced . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000 units

Required:

Compute the following variances:

1. Materials price variance (this variance is computed at the time of purchase)

2. Materials quantity variance

3. Labor rate variance

4. Labor efficiency variance


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