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Milton company produces a product, the company uses a standard cost system. Standard quantity/hours Standard price/rate Standard variable cost/unit DM ? $5/lb ? DL ?

Milton company produces a product, the company uses a standard cost system.

Standard quantity/hours Standard price/rate Standard variable cost/unit

DM ? $5/lb ?

DL ? ? ?

Variable OH ? $4/lb ?

During the month 500 items were produced and sold. Selected information is given below.

Material Used Direct Labor Variable Manufacturing OH

Total standard cost $12,800 $8,500 $1,700

for months production

Actual costs incurred $12,000 ? $1,720

Material Price variance ?

Material Quantity Variance $2,200 U

The following additional information is available for August.

Actual direct labor hours 450 hours

Difference between actual and standard variable cost per item $0.15 Unfavorable

Assuming all materials purchased have been used in production determine:

Direct labor rate variance:

a. $355U

b.$355F

c. $500F

d. $500U

$1710U

Variable overhead efficiency variance

a. $270U

b. $80F

c. $80U

d. $100F

e. $100U

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