Question
Blue Co. makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Direct materials 7.4 grams $8.00 per gram
Blue Co. makes a product with the following standard costs:
| Standard Quantity or Hours | Standard Price or Rate |
Direct materials | 7.4 grams | $8.00 per gram |
Direct labor | 0.3 hours | $16.00 per hour |
Variable overhead | 0.3 hours | $7.00 per hour |
The company reported the following results concerning this product in July.
Actual output | 2,200 | units |
Raw materials used in production | 16,420 | grams |
Purchases of raw materials | 17,900 | grams |
Actual direct labor-hours | 720 | hours |
Actual cost of raw materials purchases | $141,410 |
|
Actual direct labor cost | $12,528 |
|
Actual variable overhead cost | $5,112 |
|
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. Required: A) Compute the materials quantity variance. B) Compute the materials price variance. C) Compute the labor efficiency variance. D) Compute the labor rate variance.
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