Problem 5 - Materials and Labor Manufacturing Variances and Analysis
	Background:
	The following information is for the standard
	and actual costs for Happy Corporation.
	Standard Costs:
	Budgeted units of production - 16000
	Standard labor hours per unit - 4 hours
	Standard labor rate - $26 per hour
	Standard material per unit - 8 pounds
	Standard material cost - $12 per pound
	Actual Costs:
	Actual production - 16,500 units
	Actual materials purchased and used
	- 130000 pounds
	Actual total material cost = $1,600,000
	Actual labor - 65,000 hours
	Actual total labor costs - $1,700,000
	Part 1 - Calculate all Materials and Labor Variances
	Mark all variances as FAVORABLE or UNFAVORABLE.
	Part 2 - Analyze all variances and share possible
	theories as to why each variance turned out the way
	it did. Then, share your analysis and conclusion
	for how all materials and labor variances could fit
	together.

Problem 5 - Materials and Labor Manufacturing Variances and Analysis

Part 1:

Direct Materials Cost Variances

AQ

AP

AQ

SP

SQ

SP

Direct Materials Price Variance

Direct Materials Quantity Variance

Total Direct Materials Cost Variance

Direct Labor Cost Variances

AH

AR

AH

SR

SH

SR

Direct Labor Rate Variance

Direct Labor Time Variance

Total Direct Labor Cost Variance

Analysis of Materials Variances:

Analysis of Labor Variances: