XO-20 is an oil-based product used to remove rust on bolts and nuts that are stuck. Its accounting system uses standard costs. The standards per 0.4-liter can of solution call for 0.67 liters of material and 4 hours of labor. (0.67 liters of material are needed due to evaporation in the production process.) The standard cost per liter of material is $2.6. The standard cost per hour for labor is $13.00. Overhead is applied at the rate of $15.25 per can. Expected production is 7,700 cans with fixed overhead per year of $31,262 and variable overhead of $11.19 per unit (a 0.4-liter can).

During 2015, 7,790 cans were produced; 12,900 liters of material were purchased at a cost of $58,308; 10,090 liters of material were used in production. The cost of direct labor incurred in 2015 was $385,392, based on an average actual wage rate of $11.47 per hour. Actual overhead for 2015 was $123,000.

Determine the standard cost per unit.

Calculate material, labor, and overhead variances.

Material Quantity Variance

Labor Rate Variance

Labor Efficiency Variance

Controllable Overhead Variance

Overhead Volume Variance