Comprehensive Variance Analysis [LO1, LO2, LO3]

Helix Company produces several products in its factory, including a karate robe. The company uses a standard cost system to assist in the control of costs. According to the standards that have been set for the robes, the factory should work 780 direct labor-hours each month and produce 1,950 robes. The standard costs associated with this level of production are as follows:

Per Unit of Product Direct materials . . . . . . . . . . . . . . . . . . . . . . . . $35,490 $18.20 Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . $7,020 3.60 Variable manufacturing overhead (based on direct labor-hours) . . . . . . . . . . . . . . . . . . . . $2,340 1.20 $23.00 During April, the factory worked only 760 direct labor-hours and produced 2,000 robes. The following actual costs were recorded during the month:

Total Per Unit of Product Direct materials (6,000 yards) . . . . . . . . . . $36,000 $18.00 Direct labor . . . . . . . . . . . . . . . . . . . . . . . . $7,600 3.80 Variable manufacturing overhead . . . . . . . $3,800 1.90 $23.70 At standard, each robe should require 2.8 yards of material. All of the materials purchased during the month were used in production.
Required:
Compute the following variances for April:
1. The m aterials pr ice a nd qua ntity v ariances.
2. The labor rate and efficiency variances.
3. The v ariable m anufacturing o verhead r ate a nd e fficiency v ariances.