E23-7 Compute materials and labor variances

Nona Inc. which produces a single product, has prepared the following standard cost sheet

for one unit of the product.

Direct materials (8 pounds at $2.50 per pound)

$20

Direct labor (3 hours at $12 per hour)

$36

During the month of April, the company manufactures 235 units and incurs the following

actual costs.

Direct materials purchased and used (1,900 pounds)

$5,035

Direct labor (700 hours)

$8,260

Instructions

Compute the total, price, and quantity variances for labor and materials.

NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .

(a)

Total Materials Variance:

(

AQ

X

AP

)

minus

(

SQ

X

SP)

)

(

Value

X

Value

)

minus

(

Value

X

Value

)

=

?

minus

?

=

Value

Materials price variance:

(

AQ

X

AP

)

minus

(

AQ

X

SP

)

(

Value

X

Value

)

minus

(

Value

X

Value

)

=

?

minus

?

=

Value

Materials quantity variance:

(

AQ

X

SP

)

minus

(

SQ

X

SP

)

(

Value

X

Value

)

minus

(

Value

X

Value

)

=

?

minus

?

=

Value

(b)

Total Labor Variance:

(

AH

X

AR

)

minus

(

SH

X

SR

)

(

Value

X

Value

)

minus

(

Value

X

Value

)

=

?

minus

?

=

Value

Labor Price variance:

(

AH

X

AR

)

minus

(

AH

X

SR

)

(

Value

X

Value

)

minus

(

Value

X

Value

)

=

?

minus

?

=

Value

Labor quantity variance:

(

AH

X

SR

)

minus

(

SH

X

SR

)

(

Value

X

Value

)

minus

(

Value

X

Value

)

=

?

minus

?

=

Value