Question
Marley Marley Corporation produces tables. The company uses a standard cost system and applies overhead based on direct labor hours. The company has established the
Marley
Marley Corporation produces tables. The company uses a standard cost system and applies overhead based on direct labor hours. The company has established the following standard cost for one table:
Direct material (8 square feet @ $4.50 per sq ft) Direct labor (2.40 hours @ $12 per hour) Variable overhead (2.40 hours @ $2.20 per hour) Fixed overhead (2.40 hours @ $5.30 per hour) The static budget for June calls for a production level of 9,500 tables. The following information is available for the company's operations in June:
- 81,000 square feet of material were purchased at a total cost of $358,830.
- There was no beginning materials inventory. However, there were 5,250 square feet of material in ending inventory.
- 9,250 tables were manufactured.
- $268,140 in wages were paid for 21,800 hours of direct labor.
- Variable overhead incurred was $44,900.
- Fixed overhead incurred was $125,360.
1. What is the material price variance for Marley in June?
$7,875 unfavorable
$2,205 unfavorable
$5,670 unfavorable
$7,875 favorable
None of the answers listed are correct
$5,670 favorable
$2,205 favorable
2. What is the material usage variance for Marley in June?
$1,125 unfavorable
None of the answers listed are correct
$31,500 unfavorable
$7,875 unfavorable
$1,125 favorable
$7,875 favorable
$31,500 favorable
3. What is the labor efficiency variance for Marley in June?
None of the answers listed are correct
$6,540 favorable
$6,540 unfavorable
$4,800 unfavorable
$4,800 favorable
$1,740 favorable
$1,740 unfavorable
4. What is the fixed overhead spending variance for Marley in June?
$5,366 favorable
$5,366 unfavorable
$7,700 favorable
None of the answers listed are correct
$7,700 unfavorable
$4,520 unfavorable
$4,520 favorable
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