Variance Analysis


Problem 2 Variance Analysis Donnovan needs to analyze the actual material and labor costs for the month in their production of tables. The total actual labor cost was $31,500 as employees worked 1,800 hours and material cost was $55,275 for the purchase of 6,700 board feet of material. During the month 6,800 board feet of material was used in production. It takes two hours of labor and 7 board feet of material to complete a table. The standard rate for material is $8 per board foot and $18 per hour of labor. During the month there were 30 tables in various stage of completion at the start of the month, 1,000 tables were produced and 900 tables were sold. Required: Compute the material and labor price and usage variances.