What was marilyns direct labor efficiency variance for

Question

Two-Variance Analysis and Direct Labor Variance Marilyn, Inc., uses a standard cost system and analyzes overhead using a two-variance analysis. The following information relates to its operations in April:

Actual total cost for direct labor	$86,800
Total direct labor hours worked	14,000
Total standard labor hours for the output in April	15,000
Direct labor rate variance-unfavorable	$2,800
Actual total overhead cost	$32,000
Budgeted fixed overhead cost	$9,000
Practical capacity, in hours	12,000
Total overhead application rate per standard direct labor hour	$2.25

Note: For the analysis of the total overhead variance, set up a model similar to the one presented in Exhibit 15.17.

Required

1. What was Marilyn's direct labor efficiency variance for April?

2. What was Marilyn's factory overhead flexible-budget variance for April?

3. What was Marilyn's production-volume variance for April?

4. What is the relationship between the direct labor efficiency variance and the variable overhead efficiency variance?

Answer 1

The assignment basically belongs to the Two-Variance Analysis and Direct Labor Variance. Please read the case and as per guidelines provide solution by solving it methodically. Marilyn, Inc., employs a standard cost system and examines overhead employing a two-variance analysis. The given information associates to the operations in April (information table illustrated above in problem). Problem 1: Determine Marilyn's direct labor efficiency variance for the month April? Problem 2: Determine Marilyn's factory overhead flexible-budget variance for the month April? Problem 3: Determine Marilyn's production-volume variance for the month April? Problem 4: Determine the relationship between the direct labor efficiency variance and the variable overhead efficiency variance?