Lexi Belcher picked up the monthly report that Irvin Santamaria left on her desk. She smiled as her eyes went straight to the bottom line of the report and saw the favorable variance for operating income, confirming her decision to push the workers to get those last 310 cases off the production line before the end of the month. But as she glanced over the rest of numbers, Lexi couldn't help but wonder if there were errors in some of the line items. She was puzzled at how most of the operating expenses could be higher than the budget since she had worked hard to manage the production line to improve efficiency and reduce costs. Yet the report, shown below, showed a different story. Actual Budget Variance Cases produced and sold 10,300 9,990 310 Favorable Sales revenue $2,080,600 $1,925,000 $155,600 Favorable Less variable expenses Direct material 592,750 575,500 17.250 Unfavorable. Direct labor 288.500 272,500 16.000 Unfavorable Variable manufacturing overhead 236,600 235,800 800 Unfavorable Variable selling expenses 112.000 109,000 3.000 Unfavorable Variable administrative expenses 42,750 41,500 1.250 Unfavorable Total variable expense 1.272.600 1,234,300 38,300 Unfavorable Contribution margin 808,000 690,700 117,300 Favorable Less fixed expenses Fixed manufacturing overhead 115,000 118,000 3,000 Favorable Fixed selling expenses 85,250 84,400 850 Unfavorable Fixed administrative expenses 137,000 135,500 1,500 Unfavorable i Total fixed expense 337,250 337,900 Operating income $470,750 $352,800 (650) Favorable $117,950 Favorable Lexi picked up the phone and called Irvin. "Irvin, I don't get it. We beat the budgeted operating income for the month, but look at all the unfavorable variances on the operating costs. Can you help me understand what's going on?" "Let me look into it and I'll get back to you, Irvin replied. Irvin gathered the following additional information about the month's performance. . Direct materials purchased: 54,000 pounds at a total of $618,300 Direct materials used: 51.300 pounds Direct labor hours worked: 27,280 at a total cost of $304,260 . Machine hours used: 52,000 Irvin also found the standard cost card for a case of product. Standard Price Standard Quantity Standard Cost Irvin also found the standard cost card for a case of product. Direct materials Direct labor Standard Price $11.45 per pound Standard Quantity Standard Cost 5.00 pounds $57.25 $11.25 per DLH 2.60 DLH 29.25 Variable overhead $4.60 per MH 5MH 23.00 Fixed overhead $2.60 per MH 5MH 13.00 Total standard cost per case $122.50 (a-g) for the month (If variance is zero, select "Not (a-g) (a-b) Calculate the direct material price variance and direct material quantity variance for the month. (If variance is zero, select "Not Applicable and enter O for the amounts.) Direct material price variance $ $ Direct material quantity variance Not Applicable Favorable (c-d) Calculate the direct labor rate variance and direct labor efficiency variance for the month. (Round answers to O decimal places, eg. 1.525. If variance is zero, select "Not Applicable" and enter O for the amounts) Direct labor rate variance $ $ Direct labor efficiency variance (e-f) Calculate the variable overhead spending variance and variable overhead efficiency variance for the month. (If variance is zero, select "Not Applicable" and enter O for the amounts) Variable overhead spending variance S Variable overhead efficiency variance $ (e-f) Calculate the variable overhead spending variance and variable overhead efficiency variance for the month. (If variance is zero, select "Not Applicable" and enter 0 for the amounts.) Variable overhead spending variance $ Variable overhead efficiency variance (g) Calculate the fixed overhead spending variance for the month. (If variance is zero, select "Not Applicable" and enter O for the amounts.) Fixed overhead spending variance eTextbook and Media Save for Later $ Attempts: unlimited Submit