Question

Pagley Company’s standard labour cost of producing one unit of product DD is 3.00 hours at the rate of $10.00 per hour. During August, 30,500 hours of labour are incurred at a cost of $10.10 per hour to produce 10,000 units of product DD.

what is total material variance

materials price variance

materials quantity variance

Answer 1

	Per Unit	Standard Cost
		Hours	Rate	Cost
	Labour Cost	3	10	30
	Labout Cost	30000	10	300000
	for 10000 units
		Actual Cost
		Hours	Rate	Cost
	Labour Cost	30500	10.10	308050
		Units Produced		10000
1	Material Variance	Standard Cost – Actual Cost
			300000-308050
			-8050	Adverse
2	Material Price Variance	( Standard Price - Actual Price ) * Actual Quantity
			(10-10.10)*30500
			-3050	Adverse
3	Material Quantity Variance	( Standard Quantity - Actual Quantity) * Standard Price
			(30000-30500)*10
			-5000	Adverse