Ceelo SE purchased (at a cost of €10,200) and used 2,400 kilograms of materials during May. Ceelo’s standard cost of materials per unit produced is based on 2 kilograms per unit at a cost €5 per kilogram. Production in May was 1,050 units.

Instructions

a. Compute the total, price, and quantity variances for materials.

b. Assume Ceelo also had an unfavorable labor quantity variance. What is a possible scenario that would provide one cause for the variances computed in (a) and the unfavorable labor quantity variance?