Review the material variances and for each determine the impact on the income statement, identify a possible reason for the variance and provide a recommendation to eliminate/reduce the variation.

3 Gripper Tire Co. manufactures automobile tires. Standard costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 4,160 tires were as follows Standard Costs Actual Costs Direct materials Direct labor Factory overhead 100,000 lbs. at $6.40 2,080 hrs. at $15.75 Rates per direct labor hr, based on 100% of normal capacity of 2,000 direct labor hrs: 101,000 lbs. at $6.50 2,000 hrs. at $15.40 Variable cost, $4.00 Fixed cost, $6.00 $8,200 variable cost $12,000 fixed cost Each tire requires 0.5 hour of direct labor. Reauired: Sheet1Sheet2 Sheet3 Type here to search