Krane Company has a standard costing system and keeps all its costs up to date. The company's

main product is beach towels which are made in a single department. The standard variable costs for

one beach towel (unit) are as follows:

Direct materials

(3 yards at $1.00 per yard)

$ 3.00

Direct labor (1/2 hour at $9.00 per hour)

4.50

Variable overhead (1/2 hour @ $5.00 per direct labor hour)

2.50

Standard variable cost per unit

$10.00

The company's normal capacity is 10,000 direct labor

hours. Its budgeted fixed overhead costs for the

year were $24,000. During the year, it produced and sold 22,000 beach towels and it purchased

66,250 yards of direct materials; the purchase cost was $0.99 per yard.

There is no beginning and

ending invento

ry for direct materials.

The average labor rate was $9.10 per hour, and 10,900 direct

labor hours were worked. The company's actual variable overhead costs for the year were $55,100,

and its fixed costs were $24,500.

Using the data given, compute the fol

lowing using formulas or diagram form:

1. Direct materials cost variances:

a. Direct materials price variance

b. Direct materials quantity variance

c. Total direct materials cost variance

2. Direct labor cost variances:

a. Direct labor rate variance

b. Direct labor efficiency variance

c. Total direct labor cost variance

3. Variable overhead variances:

a. Variable overhead spending variance

b. Variable overhead efficiency variance

c. Total variable overhead variance

4. Fixed overhead variances:

a. Fixed overhead budget variance

b. Fixed overhead volume variance

c. Total fixed overhead variance