Lisle Manufacturing Has Developed the Following Standards for One of Its

Essay

Lisle Manufacturing has developed the following standards for one of its products:
The company records materials price variances at the time of purchase.
During August, Lisle purchased 16,000 yards of material costing £169,600 and used 12,500 yards in its manufacturing process. There was no material inventory at August 1. Lisle recorded a total of 4,600 direct labour hours worked for a total payroll of £72,680. Lisle manufactured 1,200 units in August.
Required:

a.
Calculate the materials price variance and indicate whether it is favorable or unfavorable.
b.
Calculate the materials usage variance and indicate whether it is favorable or unfavorable.
c.
Calculate the labour rate variance and indicate whether it is favorable or unfavorable.
d.
Calculate the labour efficiency variance and indicate whether it is favorable or unfavorable.