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.

Calculate the following variances for March for Riggins, Inc.. Identify whether the variance is favorable or unfavorable?

(a)	Materials Price Variance	$	FavorableNot ApplicableUnfavorable
(b)	Materials Quantity Variance	$	UnfavorableFavorableNot Applicable
(c)	Labor Price Variance	$	UnfavorableFavorableNot Applicable
(d)	Labor Quantity Variance	$	Not ApplicableFavorableUnfavorable

Answer rating: 100% (QA)

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