Question
Direct materials: 20 square feet $100.00 Direct labour:$7 per hour 28.00 Variable overhead: 4 hours 16.00 Total standard variable cost per unit $144.00 The company
Direct materials: 20 square feet
$100.00
Direct labour:$7 per hour
28.00
Variable overhead: 4 hours
16.00
Total standard variable cost per unit
$144.00
The company records materials price variances at the time of purchase.
The following activities relate to the month of April:
Actual Materials purchased
90,000 square feet at$6.10 persq. foot
Actual Materials used
82,000 square feet
Actual units sold
6,000 units
Actual Units produced
4,200 units
Budgeted units
4,500 units
Actual Direct labour
15,500 hours at $6.25 per hour
Actual Variable overhead
$59,000
Required:
a. Calculate material price variance and indicate whether it is favorable or unfavorable(2 Marks)
a.Calculate the labour efficiency variance and indicate whether it is favorable or unfavorable.(2 Marks)
b.Calculate the variable overhead spending variance and indicate whether it is favorable or unfavorable. (2 Marks)
c.Calculate the variable overhead efficiency variance and indicate whether it is favorable or unfavorable. (2 Marks)
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