Riggins Inc. manufactures one product called tybos. The company uses a standard cost system and sells each tybo for $8. At the start of monthly production Riggins estimated 9500 tybos would be produced in March. Riggins has established the following material and labor standards to produce one tybo: $\begin{array}{lcc}
&\text { Standard Quantity}&\text { Standard Price }\
\text { Direct materials } & 2.5 \text { pounds } & \$ 3 \text { per pound } \
\text { Direct labor } & 0.6 \text { hours } & \$ 10 \text { per hour }
\end{array}$ During March 2016 the following activity was recorded by the company relating to the production of tybos:
1. The company produced 9000 units during the month.
2. A total of 24000 pounds of materials were purchased at a cost of $66000.
3. A total of 24000 pounds of materials were used in production.
4. 5000 hours of labor were incurred during the month at a total wage cost of $55000.
Instructions
Calculate the following variances for March for Riggins Inc.
(a) Materials price variance
(b) Materials quantity variance
(c) Labor price variance
(d) Labor quantity variance

Question

Riggins Inc. manufactures one product called tybos. The company uses a standard cost system and sells each tybo for $8. At the start of monthly production Riggins estimated 9500 tybos would be produced in March. Riggins has established the following material and labor standards to produce one tybo: $\begin{array}{lcc}
&\text { Standard Quantity}&\text {  Standard Price }\
\text { Direct materials } & 2.5 \text { pounds } & \$ 3 \text { per pound } \
\text { Direct labor } & 0.6 \text { hours } & \$ 10 \text { per hour }
\end{array}$  During March 2016 the following activity was recorded by the company relating to the production of tybos:
1. The company produced 9000 units during the month.
2. A total of 24000 pounds of materials were purchased at a cost of $66000.
3. A total of 24000 pounds of materials were used in production.
4. 5000 hours of labor were incurred during the month at a total wage cost of $55000.
Instructions
Calculate the following variances for March for Riggins Inc.
(a) Materials price variance
(b) Materials quantity variance
(c) Labor price variance
(d) Labor quantity variance

Quizplus · Accepted Answer

The Answer of Riggins Inc. manufactures one product called tybos. The company uses a standard cost system and sells each tybo for $8. At the start of monthly production Riggins estimated 9500 tybos would be produced in March. Riggins has established the following material and labor standards to produce one tybo: $\begin{array}{lcc}
&\text { Standard Quantity}&\text {  Standard Price }\
\text { Direct materials } & 2.5 \text { pounds } & \$ 3 \text { per pound } \
\text { Direct labor } & 0.6 \text { hours } & \$ 10 \text { per hour }
\end{array}$  During March 2016 the following activity was recorded by the company relating to the production of tybos:
1. The company produced 9000 units during the month.
2. A total of 24000 pounds of materials were purchased at a cost of $66000.
3. A total of 24000 pounds of materials were used in production.
4. 5000 hours of labor were incurred during the month at a total wage cost of $55000.
Instructions
Calculate the following variances for March for Riggins Inc.
(a) Materials price variance
(b) Materials quantity variance
(c) Labor price variance
(d) Labor quantity variance

Riggins Inc During March 2016 the Following Activity Was Recorded by the a Standard