Batista Manufacturing Variances
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See the attached file for the full problem description.
(a) Compute the total, price, and quantity variances for materials and labor.
(b) Provide two possible explanations for each of the unfavorable variances calculated above and suggest where responsibility for the unfavorable result might be placed.
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Solution Summary
This solution is comprised of an explanation on how to compute total materials variance and total labor variance, along with explanations. An Excel file attachment is also provided. To understand how the calculations on Excel have been computed, click the cells directly.
Solution Preview
Please open the Excel file attachment to understand how the individual calculations have been completed.
All figures are in $
(a) Total materials variance:
AQ*AP-SQ*SP
160000 - 156000= 4000 Unfavorable
Total material variance is unfavorable is due to unfavorable quantity variance or ...
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