Materials and labor variances LO 3 Leathercrafters Inc. uses a standard cost to account for its single

Question:

Materials and labor variances LO₃ Leathercrafters Inc. uses a standard cost to account for its single product. The standards established for the product include the following:

The following operating data came from the records for the month:

In process, beginning inventory, none.
In process, ending inventory, 800 units, 80% complete as to labor; material is issued at the beginning of processing.
Completed during the month, 5,600 units.
Materials issued to production were 51,680 pounds @ $0,045 per pound.
Direct labor was $215,840 at the rate of $5.68 per hour.
Required:
Calculate the following variances using the diagram format in Figure 7-1:
1. Materials price.
2. Materials quantity.
3. Net materials variance.
4. Labor rate.
5. Labor efficiency.
6. Net labor variance.
(Hint: Before determining the standard quantity for materials and labor, you must first compute the equivalent units for materials and labor.)