The following standard costing data, per unit, are for Black Ltd. for January:

Direct materials..............................................45 kilograms at $8 per kilogramDirect labour 6 hours at................................$30 per hourVariable overhead 6 hours at.......................$10 per hourFixed overhead..............................................$45

For January, Black?s flexible budget volume of output was 720 units. Budgeted (planned) output was 750 units. Direct materials purchased and used were 31,000 kilograms at a total cost of $251,720. Direct labour used was 4,800 hours at $28.50 per hour. Variable overhead cost was $42,700. Actual fixed overhead cost was $38,000. Fixed overhead cost is applied using direct labour-hours. The normal volume is the same as the planned volume for January.

Required:

1. Without doing any calculations, complete a table like the following, adding as many rows as needed, and then answer the question. To illustrate the format, we show you three rows. Because fixed overhead cost variances have a different structure, we show the information you need to fill out. The question marks indicate the information you must provide. Can you tell for each variance if it will exist and its nature, F or U, from the table?

2. Calculate the direct labour flexible budget variances.

3. Calculate the direct materials variances.

4. Compute the variable overhead variances.

5. Compute the fixed overhead variances.

Transcribed Image Text:

Variance AR SR AQ SQ DM, price variance $251,720/ 31,000 $8/kg N/A N/A 31,000 kg DM, quantity variance N/A N/A Actual cost = ? Fixed overhead variances Planned volume of labour-hours = ? Standard volume of direct labour-hours for actual output Budgeted cost = ? 6 hours x ? units