Assignment
Sweetwater Company manufactures two products, Mountain Mist and Valley Stream. The company prepares its master budget on the basis of standard costs. The following data are for March:
|
Standards
|
Mountain Mist
|
Valley Stream
|
|
Direct materials
|
3 ounces at $14.90 per ounce
|
4 ounces at $17.10 per ounce
|
|
Direct labor
|
5 hours at $60.10 per hour
|
6 hours at $77 per hour
|
|
Variable overhead (per direct labor-hour)
|
$48
|
$53.10
|
|
Fixed overhead (per month)
|
$358,775
|
$398,580
|
|
Expected activity (direct labor-hours)
|
6,350
|
7,800
|
|
Actual results
|
|
|
|
Direct material (purchased and used)
|
3,700 ounces at $14.10 per ounce
|
4,600 ounces at $18.75 per ounce
|
|
Direct labor
|
4,960 hours at $62.25 per hour
|
7,470 hours at $81.60 per hour
|
|
Variable overhead
|
$254,550
|
$384,510
|
|
Fixed overhead
|
$319,950
|
$398,100
|
|
Units produced (actual)
|
1,060 units
|
1,210 units
|
Required:
a. Compute a variance analysis for each variable cost for each product.
b. Compute a fixed overhead variance analysis for each product.