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Question - ABS Company has set the following standards for one unit of product:
Direct material Quantity: 6.2 pounds per unit
Price per pound: $11 per pound
Direct labor Quantity: 6 hours per unit
Rate per hour: $23 per hour
Actual costs incurred in the production of 2,800 units were as follows: Direct material: $194,350 ($11.50 per pound).
Direct labor: $393,750 ($22.50 per hour)
All materials purchased were consumed during the period.
Required - Calculate the direct-material price and quantity variances, and the direct-labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.
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