Recompute the variances from the second Acme Inc. exercise using $0.0725 as the standard cost of the material and $14 as the standard labor cost per hour. How has your explanation of the variances changed?

Data from EA13:

Acme Inc. has the following information available:

A. Compute the material price and quantity, and the labor rate and efficiency variances.

B. Describe the possible causes for this combination of favorable and unfavorable variances.

Transcribed Image Text:

Actual price paid for material Standard price for material Actual quantity purchased and used in production Standard quantity for units produced Actual labor rate per hour Standard labor rate per hour Actual hours Standard hours for units produced $1.00 $0.90 100 110 15 16 $ $ 200 220