Using variance analysis and interpretation Last year, Tri-Rivers Corporation adopted a standard cost...

Using variance analysis and interpretation

Last year, Tri-Rivers Corporation adopted a standard cost system. Labor standards were set on the basis f time studies and prevailing wage rates. Materials standards were determined from materials specifications and the prices then in effect. On June 30, the end of the current fiscal year, a partial trial

Balance revealed the following:

	Debit	Credit
Materials Price Variance	25,000
Materials Quantity Variance		9,000
Labor Rate Variance		30,000
Labor Efficiency Variance		7,500

Standards set at the beginning of the year have remained unchanged. All inventories are priced at standard cost. What conclusions can be drawn from each of the four variances shown in Tri-Rivers’ trial balance?