[11 points] Glenville Company manufactures a single product that has a standard materials cost of $20 (4 units of materials at $5 per unit), standard direct labor cost of $9 (1 hour per unit), and standard variable overhead cost of $4 (based on direct labor hours). Fixed overhead is budgeted at $17,000 per month. The following data pertain to operations for May 2016:

Actual Units Produced: 1,500 units

Materials purchased:8,000 units; total cost $39,400

Materials used in production:6,200 units of materials

Direct labor used (actual):1,500 hours; total cost $15,000

Variable overhead costs incurred (actual):$5,960

Fixed overhead costs incurred (actual):$17,500

The Flexible Budget for the operations of May 2016 is as follows:

Required:

[5 points] Compute the following variances (show calculations in Form 5-A):

materials price variance

materials usage variance

labor rate variance

variable overhead efficiency variance

fixed overhead spending budget variance

		Circle One
materials price variance
materials usage variance
labor rate variance
variable overhead efficiency variance
fixed overhead spending (budget) variance

[2 points] Give a possible explanation for 2 of the 5 variances computed in part (a).

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[4 points] Produce the Journal Entries for materials price variance and materials usage variance. Use Form 5 C