The following direct materials and direct labor data pertain to the operations of Batista Manufacturing Company for the month of August.
| Costs | ||
| Actual labor rate | 13 | Per hour |
| Actual materials price | 128 | Per ton |
| Standard labor rate | 12 | Per hour |
| Standard materials price | 130 | Per ton |
| Quantities | |
| Actual hours incurred and used | 4,250 hours |
| Actual quantity of materials purchased and used | 1,250 tons |
| Standard hours used | 4,300 hours |
| Standard quantity of materials used | 1,200 tons |
Instructions
a. Compute the total, price, and quantity variances for materials and labor.
b. Provide two possible explanations for each of the unfavorable variances calculated above, and suggest where responsibility for the unfavorable result might be placed.
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