Problem
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Standard Quantity or Hours
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Standard Price or Rate
|
|
Direct materials
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3 kilos
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$3.00 per kilo
|
|
Direct labor
|
0.2 hours
|
$20.00 per hour
|
|
Variable Overhead
|
0.2 hours
|
$4.00 per hour
|
In June the company produced 9,100 units using 27,010 kilos of the direct material and 1,800 direct labor-hours. During the month the company purchased 27,010 kilos of the direct material at a price of $3.70 per kilo. The actual direct labor rate was $19.90 per hour and the actual variable overhead rate was $4.20 per hour. Variable overhead is applied on the basis of direct labor-hours.
Required:
a. Compute the materials quantity variance.
b. Compute the materials price variance.
c. Compute the labor efficiency variance.
d. Compute the labor rate variance.
e. Compute the variable overhead efficiency variance.
f. Compute the variable overhead rate variance.