Materials and labor variances}

Nash 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 a 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 \(\$ 18\) 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 335:
1. Materials price and quantity variances.
2. Labor rate and efficiency variances.

Transcribed Image Text:

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