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Variance Analysis
The following information is available for Mandalay Company:
Actual
Materials: 12,000 pounds purchased at $2.50 per pound; used 10,500 poundsDirect Labor : 1800 hours at $12 per hourUnits produced: 500
Standard
Materials: 20 pounds per unit at a price of $2.20 per poundDirect labor: 4 hours per unit at a wage rate of $10 per hour
How would I calculate the below (b/c I am lost!) I'm not understanding what numbers am I using?
-Material Price Variance = (Actual Price - Standard Price) x Actual Quantity-Material Quantity Variance = (Actual Quantity - Standard Quantity) x Standard Price-Direct labor rate and efficiency variance-Direct labor rate variance = (Actual rate - Standard rate) x Actual hours
Direct labor efficiency variance = (Actual hours - Standard Hours) x Standard Rate
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