B & W Company developed the following standard costs for its product for 2020:

B & W COMPANY

Standard Cost Card

Cost Elements Standard Quantity Standard Price = Standard Cost

Direct materials 4 kilograms $ 10 $40

Direct labour 2 hours 20 40

Variable overhead 2 hours 9 18

Fixed overhead 2 hours 4 8

$106

The company expected to work at the 30,000 direct labour hours level of activity and produce 15,000 units of product.

Actual results for 2020 were as follows:

• 14,200 units of product were actually produced.
• Direct labour costs were $552,420 for 27,900 direct labour hours actually worked.
• Actual direct materials purchased and used during the year cost $543,320 for 57,800 kilograms.
• Total actual manufacturing overhead costs were $340,000.

Required:

Calculate the following variances for B & W Company for 2020 and indicate whether the variance is favourable or unfavourable.

a. Direct materials quantity variance. (3 marks)

b. Direct labour price variance. (3 marks)

c. Overhead budget variance. (5 marks)

d. Overhead volume variance. (5 marks)