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Memory Solutions is the market leader in the Secure Digital (SD) card industry and sells memory cards for use in portable devices such as mobile

Memory Solutions is the market leader in the Secure Digital (SD) card industry and sells memory cards for use in portable devices such as mobile phones, tablets, and digital cameras. Its most popular card is the Mini SD, which it sells through outlets such as Target and Walmart for an average selling price of $13. MicroDisk has a standard monthly production level of 415,000 Mini SDs in its Taiwan facility. The standard input quantities and prices for direct-cost inputs are as follows:

Quantity per

Standard

Cost Item

Mini SD card

Unit Costs

Direct materials:

Speciality polymer

16

mm

$0.09

/mm

Connector pins

15

units

$0.10

/unit

Wi-Fi transreceiver

1

unit

$0.40

/unit

Direct manufacturing labour:

Setup

4

min.

$12

/hr.

Fabrication

5

min.

$30

/hr.

Calculate the following variances. Comment on the variances and provide potential reasons why they might have arisen, with particular attention to the variances that may be related to one another:

1.

Selling-price variance

2.

Direct materials price variance, for each category of materials

3.

Direct materials efficiency variance, for each category of materials

4.

Direct manufacturing labour price variance, for setup and fabrication

5.

Direct manufacturing labour efficiency variance, for setup and fabrication

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