Tiger,Inc.,has developed the following standard cost data based on 60,000 direct labor hours,which is 75% of capacity:
$\begin{array}{llr}
\text {Direct materials (6 lbs. @\$2/1b.) } & \$12\
\text {Directlabor(1hrs.@\$8/hr.) } &8\
\end{array}$

During the last period,the company operated at 80% of capacity and produced 128,000 units.Actual costs were:
$\begin{array}{llr}
\text {Direct materials (760,000 } &\$ 1,558,000\
\text { lbs.)} &\
\text { Direct labor } (126.000 \mathrm{hrs}&1.014 .300
\end{array}$

Determine the direct materials price and quantity variances and the direct labor rate and efficiency variances.Indicate whether each variance is favorable or unfavorable.

Question

Tiger,Inc.,has developed the following standard cost data based on 60,000 direct labor hours,which is 75% of capacity:
 $\begin{array}{llr}
  \text {Direct materials (6 lbs. @\$2/1b.)  } & \$12\
 \text {Directlabor(1hrs.@\$8/hr.)  } &8\
\end{array}$

During the last period,the company operated at 80% of capacity and produced 128,000 units.Actual costs were:
 $\begin{array}{llr}
  \text {Direct materials  (760,000  } &\$ 1,558,000\
 \text {  lbs.)} &\
 \text { Direct labor } (126.000 \mathrm{hrs}&1.014 .300 
\end{array}$
 
Determine the direct materials price and quantity variances and the direct labor rate and efficiency variances.Indicate whether each variance is favorable or unfavorable.

Quizplus · Accepted Answer

The Answer of Tiger,Inc.,has developed the following standard cost data based on 60,000 direct labor hours,which is 75% of capacity:
 $\begin{array}{llr}
  \text {Direct materials (6 lbs. @\$2/1b.)  } & \$12\
 \text {Directlabor(1hrs.@\$8/hr.)  } &8\
\end{array}$

During the last period,the company operated at 80% of capacity and produced 128,000 units.Actual costs were:
 $\begin{array}{llr}
  \text {Direct materials  (760,000  } &\$ 1,558,000\
 \text {  lbs.)} &\
 \text { Direct labor } (126.000 \mathrm{hrs}&1.014 .300 
\end{array}$
 
Determine the direct materials price and quantity variances and the direct labor rate and efficiency variances.Indicate whether each variance is favorable or unfavorable.