Solving for materials and labor (Appendix 11.1). Western Company makes fireplace screens. Under the flexible budget, when the firm uses 75,000 direct labor hours, budgeted variable overhead is $75,000 whereas budgeted direct labor costs are

$450,000. All data apply to the month of February.

The following are some of the variances for February (F denotes favorable;

U denotes unfavorable):

During February, the firm incurred $400,000 of direct labor costs. According to the standards, each fireplace screen uses one pound of materials at a standard price of $4.00 per pound. The firm produced 100,000 units in February. The materials price variance was $.30 per pound, whereas the average wage rate exceeded the standard average rate by $.50 per hour.
Compute the following for February, assuming there are beginning inventories but no ending inventories of materials:

a. Pounds of materials purchased.

b. Pounds of material usage over standard.

c. Standard hourly wage rate.

d. Standard direct labor hours for the total February production.

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Variable Overhead Price Variance $12,000 U Variable Overhead Efficiency Variance $20,000 U Materials Price Variance $30,000 F Materials Efficiency Variance $20,000 U