Principles of Cost Accounting: P8-5 Preppy Products Manufacturing Company uses a standard

Principles of Cost Accounting

P8-5 Analysis of materials and labor variances
Preppy Products Manufacturing Company uses a standard cost system in accounting for the cost of production of its only product, Status. The standards for the production of one unit of Status follow:
Direct materials: 10 feet of Class at $0.75 per foot and 3 feet of Chic at $1.00 per foot.
Direct labor: 4 hours at $8.00 per hour.
Factory overhead: applied at 150% of standard direct labor costs.
There was no beginning inventory on hand at July 1. Following is a summary of costs and related date for the production of Status during the following year ended June 30:
100,000 feet of Class were purchased at $0.72 per foot.
30,000 feet of Chic were purchased at $1.05 per foot.
8,000 units of Status were produced that required 78,000 feet of Class and 31,000 hours of direct labor at $7.80 per hour.
6,000 units of product Status were sold.

On June 30, there are 22,000 feet of Class, 4,000 feet of Chic, and 2,000 completed units of Status on hand. All purchases and transfers are "charged in" at standard.

Required:
Calculate the following, using the formulas on page 335:
1. materials quantity variance for Class;
2. materials quantity variance for Chic
3. materials price variance for Class (recorded at purchase)
4. materials price variance for Chic (recorded at purchase)
5. labor efficiency variance
6. labor rate variance
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