PROBLEMS P8-1 Materials and labor variances Nash Inspection Inc. specializes in determining whether a building or house's drain pipes are properly tied into the city's sewer system. The company pours a colored chemical through the pipes and collects an in spection sample from each outlet, which is then analyzed. Each job should take 15 hours for each of 4 inspectors, who are paid $18 per hour. ach job uses 5 gallons of Liquid Lite (a colored chemical), which costs $25 per gallon. Data from the company's most recent job (a building) ollow: 5 men worked a total of 80 hours and were paid $17.50 per hour . . . 5.5 gallons of Liquid Lite were used and cost $27.50 per gallon.... 151.25 $1,551.25 Total cost of the job Required: Compute the following variances, using the formulas on page 1. Materials price and quantity variances 2. Labor rate and efficiency variances. 335