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Sagnik B.

asked • 01/03/15

Materials Quantity Usage Variance and Labor Efficiency Variance

The Albright Company manufactures rubber parts for the automobile industry. The company had planned to produce 4,750 units according to the November budget. Its material standard specifies a cost of $2.70 per gallon and usage of 1.5 gallons per unit. Variable manufacturing overhead is $2 per direct labor hour. Total standard direct labor hours allowed in November budget is 2,375 hours for the month. Total direct labor costs are budgeted to be $19,000. During November, the company made 4,000 units and incurred the following costs:
Direct Materials Purchased : 8,100 gallons at $3.10 per gallon
Direct Materials used : 7,600 gallons
Direct Labor Used : 2,400 at $8.25 per hour
Actual Variable Overhead : $4,175
Question 1) Albright's material (or usage) variance for November was ?
A) $3,240 Favorable B) $4,320 Favorable C) $3,240 Unfavorable D) $4,320 Unfavorable
E) None of Above
Answer was D) but I don't get how, please show help with steps.
Question 2) Albright's labor efficiency variance for November was ?
A) $3,200 unfavorable B) $600 unfavorable C) $3,200 favorable D) $600 favorable E) $50 Favorable
Answer was A) but I don't get how, please show help with steps 

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