# Standard Costing Question & Answer For Materials & Labor Variances

Question:

You are required to calculate the variance in respect of the following:

 (a) Materials: Standard price-\$4.15 per unit; actual price-\$4.28 per unit: material requisitioned 1,000 units; production achieved 1,020 (b) Labor Standard rate-\$1.80 per hour; rate paid \$1.95 per hour; standard time allowed per article 8 minutes; hours worked 170

 (a) Material Variances: (i) Material COST variance: = (Actual quantity x Actual price) less (Standard quantity x Standard price) =(1,000x\$4.28)-(1,020x\$4.15)=\$4,280-\$4,233=\$47(A) (ii) Material PRICE variance=(Actual price less Standard price)x Actual quantity =(\$4.28-\$4.15)x1,000=\$130(A) (iii) Material USAGE variance:=(Actual quantity less Standard quantity)x Standard price =(1,000-1,020)x\$4.15=20x\$4.15=\$83(F)

 (b) Labor Variances: (i)Direct WAGES variance=(Actual hours x Actual rate) less (Standard hours x Standard rate) =(170x\$1.95)-(136x\$1.80)=\$331.50-\$244.80=\$86.70(A) (ii) Wages RATE variance=(Actual rate less Standard rate)x Actual hours =(\$1.95-\$1.80) x 170=\$0.15×170=\$25.50(A) (iii) Labor EFFICIENCY variance=(Actual hours less Standard hours) x Standard rate =(170-136) x \$1.80=\$61.20(A)

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