Problem - Daytripper, Inc. makes a product with the following standard costs:
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Inputs
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Standard Qty per Unit
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Standard Cost
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Standard Cost per Unit
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Direct materials
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6.9 liters
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$5.00 per liter
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$34.50
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Direct labor
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0.3 hours
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$17.00 per hour
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$5.10
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Variable overhead
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0.3 hours
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$6.00 per hour
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$1.80
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The company reported the following results concerning this product in August.
Originally budgeted output 8,600 units
Actual output 8,400 units
Raw materials used in production 58,330 liters
Actual direct labor-hours 2,310 hours
Actual price of raw materials $4.90 per liter
Actual direct labor rate $17.10 per hour
Actual variable overhead rate $5.50 per hour
Variable overhead is applied on the basis of direct labor-hours.
[NOTE: For each variance calculation, be sure to note whether the variance is favorable (F) or unfavorable (U)]
a. Calculate the direct materials cost variance.
b. Calculate the direct materials efficiency variance.
c. Calculate the direct labor cost variance.
d. Calculate the direct labor efficiency variance.
e. Calculate the variable overhead cost variance.
f. Calculate the variable overhead efficiency variance.