LivingstonCorporation recently implemented a standard cost system. The company's cost accountant has provided the following data to perform a variance analysis for May:
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Standard Cost Information
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Direct Material Standard Price
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$12 Per pound
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Standard Quantity Allowed Per Unit
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4 pounds per unit
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Direct Labor Standard Rate
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$7 per hour
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Standard Hours allowed Per Unit
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0.5 hours per unit
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Fixed Overhead Budgeted
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$24,000 per month
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Normal Level of Production
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12,000 units per month
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Variable Overhead Application Rate
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$1.80 per unit
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Fixed Overhead Application Rate
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($24,000/12,000units)
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$2.00 per unit
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Total Overhead Application Rate
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3.80 per unit
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Actual Cost Information
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Cost of Material Purchased & Used
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$429,000
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Pounds of material Purchased & Used
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39,000 pounds
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Cost of Direct Labor
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$23,100
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Hours of Direct Labor
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4,200 hours
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Cost of Variable Overhead
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$17,750
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Cost of Fixed Overhead
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$24,200
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Actual Volume of Production
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10,400 units
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Compute the following variances. Indicate whether each variance is favorable (F) or unfavorable (U):
(a) Materials price variance: $__________
(b) Materials quantity variance: $__________
(c) Laborrate variance: $__________
(d) Laborefficiency variance: $__________
(e) Overhead spending variance: $__________
(f) Overhead volume variance: $__________