Leerar Corporation makes a product with the following standard costs:

In December the company produced 4,300 units using 34,870 ounces of the direct material and 2,000 direct labor-hours. During the month, the company purchased 39,800 ounces of the direct material at a total cost of $109,450. The actual direct labor cost for the month was $35,000 and the actual variable overhead cost was $3,990. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials

are purchased.

Required:

a. Compute the materials quantity variance. b. Compute the materials price variance. c. Compute the labor efficiency variance. d. Compute the direct labor rate variance. e. Compute the variable overhead efficiency variance. f. Compute the variable overhead rate variance.

Inputs...... Direct materials ........ Direct labor .............. Variable overhead ..... Standard Quantity or Hours 8.1 ounces 0.5 hours 0.5 hours Standard Price or Rate $3.00 per ounce $18.00 per hour $2.00 per hour