E12.26 (LO 2, 3, 4) The following direct materials and direct labour data are for the operations of Batista Manufacturing Company for the month of August:

Costs			Quantities
Actual labour rate	$13.00 per hour		Actual hours incurred and used	3,200 hours
Actual materials price	$89.00 per tonne		Actual quantity of materials purchased and used	910 tonnes
Standard labour rate	$12.00 per hour		Standard hours used	3,240 hours
Standard materials price	$90.00 per tonne		Standard quantity of materials used	900 tonnes

Instructions

1. Calculate the total, price, and quantity variances for materials and labour.
2. Provide two possible explanations for each of the unfavourable variances calculated in part (a), and suggest which department might be responsible for the unfavourable result.

Calculate overhead variances and list reasons for unfavourable variances.