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Rhodes Corporation manufactures a product with the following standard costs:
Direct materials (20 yards @ $1.85 per yard)
$ 37.00
Direct labor (4 hours @ $12.00 per hour)
48.00
Variable factory overhead (4 hours @ $5.40 per hour)
21.60
Fixed factory overhead (4 hours @ $3.60 per hour)
14.40
Total standard cost per unit of output
$121.00
Standards are based on normal monthly production involving 2,000 direct labor hours (500 units of output).
The following information pertains to the month of July:
Direct materials purchased (16,000 yards @ $1.80 per yard)
$28,800
Direct materials used (9,400 yards)
Direct labor (1,880 hours @ $12.20 per hour)
22,936
Actual factory overhead
16,850
Actual production in July:460 units
Question text
Using the information above, compute the following variances for the month of July, indicating whether each variance is favorable or unfavorable:
- Materials purchase price variance
- Materials quantity variance
- Labor rate variance
- Labor efficiency variance
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