Question - A firm has established standards as follows:

Direct material 3 pounds @ $4/pound = $12 per unit

Direct labor 2 hours @ $8/hour = $16 per unit

Variable overhead 2 hours @ $5/hour = $10 per unit

Actual production figures for the past year were as follows:

Units produced 500

Direct materials used 1600 pounds

Direct material purchased (1,600 pounds) $6,560

Direct labor cost (950 hours) $7790

Variable overhead cost incurred $4655

Required:

What is the materials price variance (amount and favorable or unfavorable)?

What is materials quantity variance (amount and favorable or unfavorable)?

What is the labor rate variance (amount and favorable or unfavorable)?

What is the labor efficiency variance (amount and favorable or unfavorable)?