Tuna Company set the following standard unit costs for its single product. Direct materials (25 Ibs. @ $4 per Ib.) $ 100.00 Direct labor (6 hrs. @ $8 per hr.) 48.00 Factory overhead-variable (6 hrs. @ $5 per hr.) 30.00 Factory overhead-fixed (6 hrs. @ $7 per hr.) 42.00 Total standard cost $ 220.00 The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 60,000 units per quarter. The following flexible budget information is available. Operating Levels 70% 80% 90% Production in units 42,000 48,000 54,000 Standard direct labor hours 252,000 288,000 324,000 Budgeted overhead Fixed factory overhead $ 2,016,000 $ 2,016,000 $ 2,016,000 Variable factory overhead $ 1,260,000 $ 1,440,000 $ 1,620,000 During the current quarter, the company operated at 70% of capacity and produced 42,000 units of product; actual direct labor totaled 250,000 hours. Units produced were assigned the following standard costs: Direct materials (1,050,000 Ibs. @ $4 per Ib.) $ 4,200,000 Direct labor (252,000 hrs. @ $8 per hr.) 2,016,000 Factory overhead (252,000 hrs. @ $12 per hr.) 3,024,000 Total standard cost $ 9,240,000 Actual costs incurred during the current quarter follow: Direct materials (1,000,000 Ibs. @ $4.25) $ 4,250,000 Direct labor (250,000 hrs. @ $7.75) 1,937,500 Fixed factory overhead costs 1,960,000 Variable factory overhead costs 1,200,000 Total actual costs $ 9,347,500
QUESTIONS: Compute the direct materials cost variance, including its price and quantity variances. Compute the direct labor variance, including its rate and efficiency variances. Compute the overhead controllable and volume variances.