Question:
Bronfenbrenner Co. uses a standard cost system for its single product in which variable overhead is applied on the basis of direct labor hours. The following information is given:
Standard costs per unit:
Raw materials (1.5 grams at $16.00 per gram).......................... $24.00
Direct labor (0.75 hours at $8 per hour)........................................ $6.00
Variable overhead (0.75 hours at $3 per hour)............................ $2.25
Actual experience for current year:
Units produced.................................................................................. 22,400 units
Purchases of raw materials (21,000 grams at $17 per gram). $357,000
Raw materials used......................................................................... 33,400 grams
Direct labor (16,750 hours at $8 per hour)................................... $134,000
Variable overhead cost incurred..................................................... $48,575
Compute the following variances:
a. Direct materials price variance
b. Direct materials quantity variance
c. Direct labor rate variance
d. Direct labor efficiency variance
e. Variable overhead spending variance
f. Variable overhead efficiency variance