Standard Costs and Responsibility (GMA) ‘The Carberg Corporation manufactures and sells a single product. The cost system used by the company is a standard-cost system. The standard cost per unit of product is shown below:

Material—one pound plastic @ $2.00 $ 2.00 Direct labor 1.6 hours @ $4.00 6.40 Variable overhead cost 3.00 Fixed overhead cost 1.45 $12.85 The overhead cost per unit was calculated from the following annual overhead-cost budget for a 60,000-unit volume.
Variable overhead cost:
Indirect labor 30,000 hours @ $4.00 $120,000 Supplies—Oil 60,000 gallons @ $.50 30,000 Allocated variable service-department costs 30,000 Total variable overhead cost $180,000 Fixed overhead cost:
Supervision $ 27,000 Depreciation 45,000 Other fixed costs 15,000 Total fixed overhead cost $ 87,000 Total budgeted annual overhead cost at 60,000 Units $267,000 The charges to the manufacturing department for November, when 5,000 units were produced, are given below:
Material: 5,300 pounds @ $2.00 $10,600 Direct labor: 8,200 hours @ $4.10 33,620 Indirect labor: 2,400 hours @ $4.10 9,840 Supplies—Oil: 6,000 gallons @ $.55 3,300 Other variable overhead costs 3,200 Supervision 2,475 Depreciation 3,750 Other 1,250 Total $68,035 The purchasing department normally buys about the same quantity as is used in production during a month. In November 5,200 pounds were purchased at a price of $2.10 per pound.
Calculate the following variancts from standard costs for the data given:

a. materials purchase price

b. materials efficiency

c. direct-labor wage price .

d. direct-labor efficiency

e. overhead budget . The company has divided its responsibility such that the purchasing department is responsible for the price at which materials and supplies are purchased. The manufacturing department is responsible for the quantities of materials used. Does this division of responsibilities solve the conflict between price and efficiency variances? Explain your answer.
Prepare a report which details the overhead budget variance. The report, which will be given to the manufacturing department manager, should display only that part of the variance that is the responsibility of the manager and should highlight the information in ways that would be useful to that manager in evaluating departmental performance and when considering corrective action.
. Assume that the department manager performs the timekeeping function for this manufacturing department. From time to time analysis of overhead and direct-labor variances have shown that the department manager has deliberately misclassified labor hours (e.g., listed direct-labor hours as indirect-labor hours and vice versa) so that only one of the two labor variances is unfavorable. It is not feasible economically to hire a separate timekeeper. What should the company do, if anything, to resolve this problem?