Chapter $10$

Mickey's Amusements

Mickey's Amusements manufactures ride vehicles for roller coasters. One of their products is a seat with a harness for coasters that have inversions.

Mickey's uses a standard cost system for all products. According to the standards set for the seat with a harness, the factory should work $1,100$ hours each month to produce $2,200$ seats. At the standard, each seat requires $3\mathrm{.}0$ sq$.$ ft of material. The standard costs associated with this production are:

$\backslash$table$[[$Total$],[\backslash$table$[[$Direct materials$],[$Direct labor$]],$$$44,220,$$$6\mathrm{.}70$ per sq$.$ ft$.],[$Variable manufacturing,$$6,600,$$$6\mathrm{.}00$ per hour$],[$OH$,,],[\backslash$table$[[($based on direct labor$],[$hours$)]],,],[,$$$3,520,$$$3\mathrm{.}20$ per hour$]]$

During January, the factory worked $1,000$ direct labor hours and produced $2,200$ seats.

The following actual costs incurred during January are:

$\backslash$table$[[,$Total$],[$Direct materials $(7,400,],[$sq$.$ ft$.),$$$40,700$

$1)$ what is the materials price variance?

$2)$ what is the materials quantity variance?

$3)$ what is the labor rate variance?

$4)$ what is the labor efficiency variance?

$5)$ what is the variable OH rate variance?

$6)$ what is the variable OH efficiency variance?