Exercise 25-8

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

Costs Actual labor rate $13 per hour Actual materials price $270 per ton Standard labor rate $12.50 per hour Standard materials price $272 per ton

Quantities Actual hours incurred and used 3,700 hours Actual quantity of materials purchased and used 1,100 tons Standard hours used 3,740 hours Standard quantity of materials used 1,075 tons

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

Total materials variance $ Favorable Neither favorable nor unfavorable Unfavorable Materials price variance $ Unfavorable Neither favorable nor unfavorable Favorable Materials quantity variance $ Unfavorable Favorable Neither favorable nor unfavorable Total labor variance $ Favorable Neither favorable nor unfavorable Unfavorable Labor price variance $ Favorable Neither favorable nor unfavorable Unfavorable Labor quantity variance $ Unfavorable Favorable Neither favorable nor unfavorable