Foster Corporation uses a standard cost system. There is no beginning or ending work in process, and finished goods inventory balances. The following information was provided concerning the one product produced by this company for the period that just ended: This company used Direct labor hours as the cost driver for the application of overhead. Actual price per kilogram Actual kilograms of material used Actual kilograms of material purchased Actual hourly labor rate Actual hours of production Standard price per kilogram Standard kilograms per completed unit Standard hourly labor rate Standard time per completed unit Actual Variable factory overhead Actual Fixed factory overhead Standard variable factory overhead rate Budgeted fixed overhead Units completed during the period 1. Calculate the direct materials price and quantity variance. Material purchase price variance -Material price variance should be based on material purchased, since you want to isolate the variance as soon as possible. $2.92 32,300 32,500 $19.00 4,900 labor hrs. $2.95 Variable overhead spending variance Variable overhead efficiency variance 4. Fixed manufacturing overhead budget variance. 6 Material Quantity variance - Material Quantity variance should be based on materials used, since this is monitoring the production efficiency. 2. Calculate the direct labor rate and efficiency variances. Direct Labor rate variance Direct Labor Efficiency variance 3. Variable manufacturing overhead spending and efficiency variances. $18.00 1 Hour $17,600.00 $18,100.00 You have just been hired by a local plastic pool manufacturer to determine if they are controlling their costs. You have decided to use your recent knowledge of variance analysis to assist you in this endeavor. You will analyze the variances as stated in the requirements below. $3.80 per labor hour $18,500.00 4,960 Required: Make sure you do not forget to label each variance U or F. You need to use cell references for your calculations. U or F Variance Fixed Manufacturing overhead budget variance 5. Pick out the one most significant variance that you computed above and explain the possible causes of this variance and why you chose it.