Reference no: EM131773184

Question - Rhodes Corporation manufactures a product with the following standard costs:

Direct materials (20 yards @ $1.85 per yard) $ 37.00

Direct labor (4 hours @ $12.00 per hour) 48.00

Variable factory overhead (4 hours @ $5.40 per hour) 21.60

Fixed factory overhead (4 hours @ $3.60 per hour) 14.40

Total standard cost per unit of output $121.00

Standards are based on normal monthly production involving 2,000 direct labor hours (500 units of output).

The following information pertains to the month of July:

Direct materials purchased (16,000 yards @ $1.80 per yard) $28,800

Direct materials used (9,400 yards)

Direct labor (1,880 hours @ $12.20 per hour) 22,936

Actual factory overhead 16,850

Actual production in July: 460 units

a. Compute the following variances for the month of July, indicating whether each variance is favorable or unfavorable:

(1) Materials purchase price variance

(2) Materials quantity variance

(3) Labor rate variance

(4) Labor efficiency variance