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Calculation of Labor Variances.
1.The following direct materials and direct labor data pertain to the operations of Solario Manufacturing Company for the month of August.
Costs
Actual labor rate
$18 per hour
Actual material price
$177 per ton
Standard labor rate
$17 per hour
$179 per ton
Quantities
Actual hours incurred and used
5,796 hours
Actual quantity of materials purchases and used
1,691 tons
Standard hours used
5,934 hours
Standard quantity of materials used
1,656 tons
Compute the total, price, and quantity variance for materials and labor.
Total materials variance
$______
______
Materials price variance
Materials quantity variance
Total labor variance
Labor price variance
Labor quantity variance
2.The following direct materials and labor data pertain to the operations of Solario Manufacturing Company for the month of August.
$13 per hour
$128 per ton
$12 per hour
$130 per ton
4,200 hours
1,225 tons
4,300 hours
1,200 tons
Provide two possible explanations for each of the unfavorable variances calculated in 1, and suggest where responsibility for the unfavorable result might be placed (1).
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