Exercise $11-2$ Computing All Variances $($LO$3-$ CC$15,17,18$; LO$4-$ CC$22,23)($Algo$)$

Gail Cleaners produces a commercial cleaning compound known as Carpex. The direct materials and direct labour standards for one

unit of Carpex follow:

The budgeted fixed overhead cost is $$15,208$ per month. The denominator activity level of the allocation base is $874$ direct labour$-$

hours.

During the most recent month, the following activity was recorded:

a$.9,400$ kilograms of material were purchased at a cost of $$2\mathrm{.}22$ per kilogram.

b$.$ All of the material purchased was used to produce $2,300$ units of Zoom.

c$.$ A total of $820$ hours of direct labour time was recorded at a total labour cost of $9,266.$

d$.$ The variable overhead cost was $$1,640,$ and the fixed overhead cost was $$17,366.$

Required:

Compute the direct materials price and quantity variances for the month. $($Indicate the effect of each variance by selecting $"$F$"$ for

favorable, $"$U$"$ for unfavorable, and "None" for no effect $($i$.$e$.,$ zero variance$).)$

Compute the direct labour rate and efficiency variances for the month. $($Indicate the effect of each variance by selecting $"$F$"$ for

favorable, $"$U$"$ for unfavorable, and "None" for no effect $($i$.$e$.,$ zero variance$).)$

Compute the variable overhead spending and efficiency variances for the month. $($Indicate the effect of each variance by selecting

$"$F$"$ for favorable, $"$U$"$ for unfavorable, and "None" for no effect $($i$.$e$.,$ zero variance$).$ Round "Efficiency variance" to $2$ decimal

places.$)$

Compute the fixed overhead budget and the volume variances for the month. $($Round intermediate calculations to the nearest

whole dollar amount. Indicate the effect of each variance by selecting $"$F$"$ for favorable, $"$U$"$ for unfavorable, and "None" for no

effect $($i$.$e$.,$ zero variance$).)$

Compute the underapplied or overapplied overhead for the month. $($Round intermediate calculations and round final answer to $2$

decimal places. Indicate the effect of each variance by selecting $"$F$"$ for favorable, $"$U$"$ for unfavorable, and "None" for no effect

$($i$.$e$.,$ zero variance$).)$