Flexible Budget Homework Reflections, Inc. is a company that manufactures premium car wax. The company uses a standard cost system. From the accounting records of the firm, you obtain the following information: Standard material cost $3.90 per pound Standard direct labor cost $6.00 per hour Standard pounds per unit 5 Standard labor hours per unit 3 Material purchased and used 39,500 pounds Direct labor used 25,000 hours Actual material cost $4.05 per pound Actual labor cost $6.95 per hour Number of units actually produced 8,000 units Number of units planned 10,000 units Calculate each of the following and state whether the variance is favorable or unfavorable: 

a) materials quantity variance

 b) materials price variance 

c) labor efficiency variance 

d) labor rate variance 

At the end of the year, your company had the following variances: 

Direct material price variance $3,000 

Direct material usage variance $3,500 

Direct labor rate variance $5,200 U 

Direct labor efficiency variance $7,000 

Give at least one possible cause for each of the variances and discuss the possible relationships between them

Answer rating: 100% (QA)

Calculating and Analyzing Variances for Homework Reflections Inc Variances a Material Quantity Variance Standard quantity for 8000 units 8000 5 40000 ... View the full answer