Materials and labor variances LO₃ Iverson Inspection Inc. specializes in determining whether a building or house's drain pipes are properly tied into the city's sewer system. The company pours colored chemical through the pipes and collects an inspection sample from each outlet, which is then analyzed. Each job should take 15 hours for each of 4 inspectors who are paid $ 1 8 per hour. Each job uses 5 gallons of Liquid Lite (a colored chemical), which costs $25 per gallon. Data from the company's most recent job (a building) follow:

Required:
Compute the following variances, using the formulas on page 286:
1.Materials price and quantity variances.
2. Labor rate and efficiency variances.

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5 men worked a total of 80 hours and were paid $17.50 per hour 5.5 gallons of Liquid Lite were used and cost $27.50 per gallon. Total cost of the job.... $1.400.00 151.25 $1,551,25