TBA Products Company manufactures a variety of products made of plastic and aluminum components. During the winter months, substantially all of the production capacity is devoted to the production of lawn sprinklers for the following spring and summer seasons. Other products are manufactured during the remainder of the year. The company has developed standard costs for its several products. Standard costs for each year are set in the preceding October. The standard cost of a sprinkler for the current year is $3.70, computed as follows: Direct materials Aluminum-0.2 lb @$0.40 per lb Plastic-1.0lb @ $0.38 per lb Production labor-0.3hr @$8.00 per hr Factory Overhead Total $0.08 0.38 2.40 0.84 $3.70 During February, TBA Products manufactured 8,500 good sprinklers. The company incurred the following costs, which it charged to production: Materials requisitioned for production: Aluminum-1,900lb @$0.40 per lb Plastic-regular grade- 6,000 lb @$0.38 per lb Low grade-3,500lb @ $0.38 per lb Production labor- 2,700hr @ $8.60 per hr Factory Overhead Costs Charged to production $760 2,280 1,330 23,220 7,140 $34,730 Materials price variations are not determined by usage but are charged to a materials price variation account at the time the invoice is entered. All materials are carried in inventory at standard prices. Materials purchases for February were as follows: Aluminum-1,800lb @ $0.48 per lb $864 Plastic-regular grade-3,000lb @ $0.50 per lb 1,500 Low grade*-6,000lb @ $0.29per lb 1,740 *Due to plastic shortages, the company was forced to purchase lower grade plastic than called for in the standards. This increased the number of sprinklers rejected on inspection. Required: Calculate price and usage variances for each type of material and for labor using formulas in determination of Variances Problem 8-6 Standard Quantity or Hours Actual Quantity or Hours Difference Standard Price/Rate Variance Materials quantity variance: 
 

Materials quantity variance: Aluminum Plastic Labor efficiency variance Standard Quantity Actual Quantity or Hours or Hours lbs. lbs. lbs. lbs. hrs. hrs. Standard Difference Price/Rate Variance /lb. /lb. /hr. Standard Actual Actual Quantity Price/Rate Price/Rate Difference or Hours Variance Materials purchase price variance: Aluminum /lb. /lb. lbs. Plastic regular gade /lb. /lb. lbs. Plastic low grade /lb. /lb. lbs. Labor rate variance /hr. hi /hr. hrs.