Reference no: EM133099086

Question - The following standards have been established for a raw material used to make the product:

Standard quantity of the material per unit of output 4.5 pounds

Standard price of the material $13.90 per pound

Actual material purchased 2000 pounds

Actual cost of material purchased $26200

Actual material used in production 1300 pounds

Actual output produced 220 units

Standard direct labor-hours 3.3 hours per unit

Standard direct labor wage rate $10.50 per hour

Actual direct labor-hours worked 1100 hours

Actual direct labor wages paid $11385

Required -

1. What was the labor rate variance for the month?

2. What was the labor efficiency variance for the month?

3. Discuss the concept of "management by exception"?