PART IV Direct Materials & Direct Labor Standards (20 points)

Riggins, Inc. manufactures one product called tybos. The company uses a standard cost system and sells each tybo for $8. At the start of monthly production, Riggins estimated 9,500 tybos would be produced in March. Riggins has established the following material and labor standards to produce one tybo:

Standard Quantity Standard Price

Direct materials 2.5 pounds $3 per pound

Direct labor 0.6 hours $10 per hour

During March 2013, the following activity was recorded by the company relating to the production of tybos:

1. The company produced 9,000 units during the month.

2. A total of 24,000 pounds of materials were purchased at a cost of $66,000.

3. A total of 24,000 pounds of materials were used in production.

4. 5,000 hours of labor were incurred during the month at a total wage cost of $55,000

Instructions

Calculate the following variances for March for Riggins, Inc.

(a) Materials price variance

(b) Materials quantity variance

(c) Labor price variance

(d) Labor quantity variance