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 370 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 9,930 370 Favorable Sales revenue $2,081,800 $1,985,000 $96,800 Favorable Less variable expenses Direct material 593,350 576,700 16,650 Unfavorable Direct labor 289,700 278,500 11,200 Unfavorable Variable manufacturing overhead 205,100 203,700 1,400 Unfavorable Variable selling expenses 113,200 111,400 1,800 Unfavorable Variable administrative expenses 43,350 42,700 650 Unfavorable Total variable expense 1,244,700 1,213,000 31,700 Unfavorable Contribution margin 837,100 772,000 65,100 Favorable Less fixed expenses Fixed manufacturing overhead 127,000 131,200 4,200 Favorable Fixed selling expenses 85,850 85,400 450 Unfavorable Fixed administrative expenses 149,000 147,500 1,500 Unfavorable Total fixed expense 361,850 364,100 (2,250) Favorable Operating income $475,250 $407,900 $67,350 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: 55,200 pounds at a total of $654,120 Direct materials used: 51,300 pounds Direct labor hours worked: 25,220 at a total cost of $276,001 Machine hours used: 52,000 Irvin also found the standard cost card for a case of product. Standard Price Standard Quantity Standard Cost Direct materials $11.85 per pound 5.00 pounds $59.25 Direct labor $11.05 per DLH 2.40 DLH 26.52 Variable overhead $4.00 per MH 5 MH 20.00 Fixed overhead $2.40 per MH 5 MH 12.00 Total standard cost per case $117.77 (a-g) Your answer is partially correct. (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, e.g. 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 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