CH 16 Homework Help Save & Exit Subm. Check my work Exercise 16-36 (Static) Variable Cost Variances (LO 16-5) Paynesville Corporation manufactures and sells a preservative used in food and drug manufacturing. The company carries no inventories. The master budget calls for the company to manufacture and sell 100,000 liters at a budgeted price of $75 per liter this year. The standard direct cost sheet for one liter of the preservative follows. points 8 sa $ Direct materials Direct Labor (2 pounds (0.5 hours $4) $24) 1 Skipped eBook Variable overhead is applied based on direct labor hours. The variable overhead rate is $20 per direct.labor hour. The fixed overhead rate (at the master budget level of activity is $10 per unit. All non-manufacturing costs are fixed and are budgeted at $1.2 million for the coming year. References At the end of the year, the costs analyst reported that the sales activity variance for the year was $270,000 unfavorable The following is the actual income statement in thousands of dollars) for the year. Sales revenue Less variable costs Direct materials Direct labor Variable overhead Total variable costs Contration margin Prev 3 of 5 Next > Help Save & Exit Submit Check my work Variable overhead is applied based on direct labor hours. The variable overhead rate is $20 per direct labor hout. The fixed overhead rate (at the master budget level of activity is $10 per unit. All non-manufacturing costs are fixed and are budgeted at $12 million for the coming year. 20 points At the end of the year, the costs analyst reported that the sales activity variance for the year was $270,000 unfavorable. (8 00:31 The following is the actual income statement in thousands of dollars) for the year. Skipped eBook Sales revenue Les variable costs Direet materiale Direet labor Variable overhead Total variable sota Contribution margin Less fixed costa Fixed manufacturing overhead Non-manufacturing costs Total fixed costs Operating profit References During the year, the company purchased 176.000 pounds of material and employed 40.400 hours of director Required: Next > Check my work During the year, the company purchased 176,000 pounds of material and employed 40,400 hours of direct labor. 20 points Required: a. Compute the direct material price and efficiency variances. b. Compute the direct labor price and efficiency variances. c. Compute the variable overhead price and efficiency variances (For all requirements, enter your answers in whole dollars. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) ( 8 00:31:17 Skipped Book References a. Direct materials: Price variance Efficiency variance b. Direct labor Price variance Efficiency variance Variable overhead: Price variance Efficiency variance