Delta Manufacturing Company uses a standard cost system in accounting for the cost of its main product. The following standards have been established for the direct manufacturing costs per unit:
Direct materials (2 kg at $7.50 per kilogram)................ $15.00 per unit
Direct labour (3 hours at $12 per hour)........................$36.00 per unit
Budgeted overhead for the month of April (based on expected activity of 9,000 direct labour hours) is as follows:
Variable overhead.......................$29,250
Fixed overhead..........................$19,500
Total overhead...........................$48,750
Overhead is applied based on labour hours. The average activity per month is 9,750 direct labour hours. The company calculates overhead rates based on average activity. Results for the month of April are as follows:

There was no beginning or ending work in process inventory.
Instructions
Calculate the following:
(a) Direct materials price, usage, and budget variances
(b) Labour price, usage, and budget variances
(c) Variable overhead spending, quantity, and budget variances
(d) Fixed overhead spending and volume variances

Transcribed Image Text:

Units produced Direct materials used (6,500 kg) Direct labour (9,500 hours) Variable overhead Fixed overhead Total costs 3,150 $ 44,850 116,375 28,500 20,000 $209,725