8. Batman Inc. makes Snack foods. Batman determined the standards for each unit (bag) of snacks produced requires 1.5 gallons of ingredients (direct materials) and 0.85 direct labor hours. Batman expects to pay $2 per gallon of ingredients and his employees a rate of $12 per hour. Based on the company’s forecasts, Batman is expecting to sell 25,000 units (bags) during the year. At the end of year, Batman actually sold 27,000 units (bags) and used 22,500 gallons of ingredients and paid $2.10 per gallon. Further, Human resources informed Batman that he incurred $152,750 in direct labor costs from 16,250 direct labor hours (assume no overtime is used).
What is the material usage variance? What is the material price variance? What is the labor usage variance? What is the labor rate variance?
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