Ch06-Practice Problems-PDR Question 7 of 9 < 0.19/1 Show Attempt History Current Attempt in Progress Lexi Belcher picked up the monthly report that Irvin Santamaria left on her desk. She smiled as her eyes went straight to the bottom line of the report and saw the favorable variance for operating income, confirming her decision to push the workers to get those last 340 cases off the production line before the end of the month. But as she glanced over the rest of numbers, Lexi couldn't help but wonder if there were errors in some of the line items. She was puzzled at how most of the operating expenses could be higher than the budget since she had worked hard to manage the production line to improve efficiency and reduce costs. Yet the report, shown below, showed a different story. Cases produced and sold Variance Actual Budget 10,300 9.960 $2,082,200 $2,005,000 340 Favorable $77,200 Favorable Sales revenue Less variable expenses Direct material 593,550 577,100 16,450 Unfavorable Direct labor 290,100 280,500 9,600 Unfavorable Variable manufacturing overhead 217,800 216,600 1,200 Unfavorable Variable selling expenses 113,600 112,200 1,400 Unfavorable Variable administrative expenses 43,550 43,100. 450 Unfavorable Total variable expense 1,258,600 1,229,500 29.100 Unfavorable Contribution margin 823,600 775,500 48,100 Favorable Less fixed expenses Fixed manufacturing overhead 131,000 135,600 4.600 Favorable Fixed selling expenses 86,050 85,000 1,050 Unfavorable: Fixed administrative expenses 153,000 151,500 1,500 Unfavorable Total fixed expense 370,050 372,100 (2,050) Favorable Operating income $453,550 $403,400 $50,150 Favorable Ch06-Practice Problems- PDR Question 7 of 9 0.19/1 Lexi picked up the phone and called Irvin. "Irvin, I don't get it. We beat the budgeted operating income for the month, but look at all the unfavorable variances on the operating costs. Can you help me understand what's going on?" "Let me look into it and I'll get back to you, Irvin replied. Irvin gathered the following additional information about the month's performance. . Direct materials purchased: 55,600 pounds at a total of $647,740 Direct materials used: 51,100 pounds . Direct labor hours worked: 29,340 at a total cost of $327,515 Machine hours used: 52,000 irvin also found the standard cost card for a case of product. Standard Standard Price Standard Quantity Cost Direct materials $11.65 per pound 5.00 pounds $58.25 Direct labor $11.25 per DLH 2.80 DLH 31.50 Variable overhead $4.25 per MH 5MH 21.25 Fixed overhead $2.80 per MH. 5MH 14.00 Total standard cost per case $125,00 (a-g) Your answer is partially correct. (a-b) Calculate the direct material price variance and direct material quantity variance for the month. (If variance is zero, select "Not Applicable" and enter O for the amounts.) Question 7 of 9 (a-g) 0.19/1 Your answer is partially correct. (a-b) Calculate the direct material price variance and direct material quantity variance for the month. (If variance is zero, select "Not Applicable" and enter 0 for the amounts.) $ Direct material price variance Direct material quantity variance $ Not Applicable O Favorable (c-d) Calculate the direct labor rate variance and direct labor efficiency variance for the month. (Round answers to O decimal places, e.g. 1,525. If variance is zero, select "Not Applicable" and enter O for the amounts.) Direct labor rate variance $ Direct labor efficiency variance Favorable Unfavorable (e-f) Calculate the variable overhead spending variance and variable overhead efficiency variance for the month. (If variance is zero, select "Not Applicable" and enter O for the amounts.) Variable overhead spending variance $ Variable overhead efficiency variance $ Favorable Unfavorable (g) Calculate the fixed overhead spending variance for the month. (If variance is zero, select "Not Applicable" and enter 0 for the amounts.) Fixed overhead spending variance $ Favorable eTextbook and Media