Analysis of materials and labor variances}

Preppy Products Manufacturing Company uses a standard cost system in accounting for the cost of production of its only product, Status. The standards for the production of one unit of Status follow:

There was no beginning inventory on hand at July 1. Following is a summary of costs and related data for the production of Status during the following year ended June 30 :

On June 30, there are 22,000 feet of Class, 4,000 feet of Chic, and 2,000 completed units of Status on hand. All purchases and transfers are "charged in" at standard.
{Required:}
Calculate the following, using the formulas on page 335:

1. materials quantity variance for Class;
2. materials quantity variance for Chic;
3. materials price variance for Class (recorded at purchase);
4. materials price variance for Chic (recorded at purchase);
5. labor efficiency variance;
6. labor rate variance.

Transcribed Image Text:

Direct materials: 10 feet of Class at $0.75 per foot and 3 feet of Chic at $1.00 per foot. Direct labor: 4 hours at $8.00 per hour. Factory overhead: applied at 150% of standard direct labor costs.