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Calculation of Labor Variances.

The following direct materials and labor data pertain to the operations of Solario Manufacturing Company for the month of August.

Costs
Actual labor rate	$13 per hour
Actual material price	$128 per ton
Standard labor rate	$12 per hour
Actual material price	$130 per ton

 

Quantities
Actual hours incurred and used	4,200 hours
Actual quantity of materials purchases and used	1,225 tons
Standard hours used	4,300 hours
Standard quantity of materials used	1,200 tons

 

 Instructions:

Provide two possible explanations for each of the unfavorable variances calculated in E25-8 (a), and suggest where responsibility for the unfavorable result might be placed. Refer to E25-8 (a).

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Solution Attachment

Solution document is in Excel format