Nona Inc which produces a single product has prepared the fo

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

During the month of April, the company manufactures 210 units and incurs the following actual costs.

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

Direct materials (7 pounds at $3.10 per pound)		$21.70
Direct labor (4 hours at $10.00 per hour)		$40.00

Solution

Total direct material cost variance = Actual direct material cost - Standard quantity of direct materials*Standard price = 6232-210*7*3.1 = 1675 Unfavorable Materials price variance = Actual material cost-Actual quantity*Standard rate = 6232-1900*3.1 = 342 Unfavorable Materials quantity variance = (Actual quantity-Standard quantity)*Standard rate = (1900-210*7)*3.1 = 1333 Unfavorable Total direct labor variance = Actual labor cost-Standard labor cost = 8462-210*4*10 = 62 Unfavorable Direct labor price variance = Acutal labor cost-Actual hours*Standard rate = (8462-860*10) = 138 Favorable Direct labor quantity variance = (Actual hours-Standardhours)*Standard rate = (860-210*4)*10 = 200 Unfavorable