Illustrative Problem:

These data are available for Ang Company: For every 80 units of Product N, standard costs are:

Raw MaterialsDirect Labor

Material A5 lbs @ P 7.00 LaborX 8 hrs @ P 2.00

B3 lbs9.00 Y 6 hrs 5.50

In the manufacture of 22,000 units of N, the Ang Company incurred:

Material A1, 500 lbs @ P 7.20 LaborX 2,400 hrs @ P 1.80

B500 lbs 8.40 Y 1,600 hrs 5.40

Required:

a.Material Price Variancee.DirectLaborRateVariance

b.Material Mix Variancef.DirectLaborMixVariance

c.Material Yield Varianceg.DirectLabor Yield Variance

d.Total Direct Material Varianceh.TotalDirectLaborVariance