The following direct materials and direct labor data pertain to the operations of Limanto SA for the month of August.

Instructions

a. Compute the total, price, and quantity variances for materials and labor.

b. Provide two possible explanations for each of the unfavorable variances calculated above, and suggest where responsibility for the unfavorable result might be placed.

Transcribed Image Text:

Quantities Costs Actual hours incurred per hour Actual labor rate €13 4,150 hours and used Actual materials price Actual quantity of materials €128 per ton 1,220 tons 4,300 hours purchased and used Standard hours used Standard quantity of €12.50 per hour Standard labor rate Standard materials price €130 per ton 1,200 tons materials used