MicroDisk is the market leader in the Secure Digital (SD) card industry and sells memory cards for use in portable devices such as mobile phones, tablets, and digital cameras. Its most popular card is the Mini SD, which it sells to OEMs as well as through outlets such as Target and Walmart for an average selling price of $ 8. MicroDisk has a standard monthly production level of 420,000 Mini SDs in its Taiwan facility. The standard input quantities and prices for direct- cost inputs are as follows:

Phoebe King, the CEO, is disappointed with the results for June 2014, especially in comparison to her expectations based on the standard cost data.

King observes that despite the significant increase in the output of Mini SDs in June, the product’s contribution to the company’s profitability has been lower than expected. She gathers the following information to help analyze the situation:

Calculate the following variances. Comment on the variances and provide potential reasons why they might have arisen, with particular attention to the variances that may be related to one another:

Required
1. Selling-price variance
2. Direct materials price variance, for each category of materials
3. Direct materials efficiency variance, for each category of materials
4. Direct manufacturing labor price variance, for setup and fabrication
5. Direct manufacturing labor efficiency variance, for setup andfabrication.

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Quantity per Mini SD card Standard Cost Item Unit Costs Direct materials Specialty polymer Connector pins Wi-Fi transreceiver $0.05 mm 0.10 unit 0.50 unit Direct manufacturing labor Setup Fabrication 24.00 hr 30.00 hr 1 min 2 min. Input Usage Report, June 2014 Cost Item Quantity Actual Cost Direct materials 8300,000mm $415,000 Connector pins Wi-Fi transreceiver units550,000 235,000 470,000 units Direct manufacturing labor 455,000 864,000 Set min Fabrication 446,400 min Input Usage Report, June 2014 Cost Item Quantity Actual Cost Direct materials $415,000 Connector pins Wi-Fi transreceiver units550,000 235,000 470,000 units Direct manufacturing labor 455.000 Iman 864,000 Set Fabrication min 446 400