Green River Fertilizer Company

At the beginning of the year, GRFC had the following standard cost sheet:

GRFC computes its overhead rates using practical volume, which is 54,000 units. Sales price per unit is $32 and the company budgeted for sales of 54,000 units.The actual results for the year are as follows:

a.Units produced: 53,000

b.Direct materials purchased: 274,000 pounds at $2.50 per pound

c.Direct materials used: 270,300 pounds

d.Direct labor: 40,100 hours at $17.95 per hour

e.Fixed overhead: $161,700

f.Variable overhead: $122,000

g.Actual Revenue: $1,700,000

RequiredVariance Analysis

1.Construct a model to calculate:

a.Total Variance

b.Sales Volume Variance

c.Sales Price Variance

d.Flexible Budget Variance

e.Materials Price and Quantity variances

f.Labor Rate and Efficiency variances

g.Variable Overhead Spending and Efficiency Variances

h.Fixed Overhead Spending and Volume Variances

Standard Cost Sheet for Green River Fertilizer Company Direct materials (5 lbs. @ $2.60/lb.) $13.00 Direct labor (0.75 hr. @ $18.00/hr. 13.50 Fixed overhead (0.75 hr. @ $4.00) 3.00 Variable overhead (0.75 hr. @ $3.00) 2.25 Standard cost per unit $31.75