Standard Costing at Ford

Values:

• Standard Material Cost: $15 per unit
• Actual Material Cost: $14.50 per unit
• Standard Labor Cost: $35 per hour
• Actual Labor Cost: $37 per hour

Requirements:

1. Calculate the material price variance.
2. Calculate the labor rate variance.
3. Analyze the variances and discuss possible causes.
4. Recommend actions to address adverse variances.