Paul Corp. manufactures and sells a single product. The company uses a standard cost system. The standard cost per unit of product follows:

Materials… 1 lb. plastic @ $ 3.00.......................................................................................... $ 3.00

Direct labor…1.6 hours @ $10.00.......................................................................................... 16.00

Factory overhead................................................................................................................... 4.45

Total $23,45

The charges to the manufacturing department for November, when 5,000 units were produced, follow:

Material…5,300 lb. plastic @ $3.00.................................................................................... $ 15,900

Direct labor…8,200 hours @ $9.80................................................................................... 80,360

Factory overhead............................................................................................................... 23,815

Total $120,075

The Purchasing department normally buys about the same quantity as is used in production during a month. In November, 5,500 lbs. were purchased at a price of $2.90 per pound.

Required:

Calculate the following variances from standard costs for the data given. (See pages 402 and 403)

1.Materials quantity.

2.Materials purchase price (at time of purchase).

3.Labor efficiency.

4.Labor rate.

Standard Quantity or Hours

Actual Quantity or Hours

Difference

Standard Cost

Variance

1.

Materials quantity variance

lbs.

lbs.

/lb.

3.

Labor efficiency variance

hrs.

hrs.

/hr.

Standard Cost

Actual Cost

Difference

Actual Quantity or Hours

Variance

2.

Materials purchase price variance

/lb.

/lb.

lbs.

4.

Labor rate variance

/hr.

/hr.

hrs.

Answer rating: 100% (QA)

Material Quantity Variance SP SQ SP AQ 3 50001 29 5300 500 F Material Pu... View the full answer