Question
Computing Variances and Evaluating Performance Clean Sweep Company produces all-vinyl mats. Each doormat calls for 0.5 meter of vinyl material; the material should cost $3
Computing Variances and Evaluating Performance Clean Sweep Company produces all-vinyl mats. Each doormat calls for 0.5 meter of vinyl material; the material should cost $3 per meter. Standard direct labor hours and labor cost per doormat are 0.3 hour and $6 (0.3 hour $20 per hour), respectively. Currently, the division's standard variable overhead rate is $1.50 per direct labor hour, and its standard fixed overhead rate is $0.80 per direct labor hour. In August, the division manufactured and sold 50,000 doormats. During the month, it used 25,200 meters of vinyl material; the total cost of the material was $73,080. The total actual overhead costs for August were $28,200, of which $18,200 was variable. The total number of direct labor hours worked was 10,800, and the factory payroll for direct labor for the month was $214,920. Budgeted fixed overhead for August was $9,280. Normal monthly capacity for the year was set at 58,000 doormats. 1. Compute for August the a. direct materials price variance $ b. direct materials quantity variance $ c. direct labor rate variance $ d. direct labor efficiency variance $ e. variable overhead spending variance $ f. variable overhead efficiency variance $ g. fixed overhead budget variance $ h. fixed overhead volume variance $
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