Part $3$: Is covered in Module $23.$ I also have support material in the Module $23$ Resources in the applicable weekly area.

The roofing company manufactures shingles.

Standard Cost Sheet per shingle

Direct materials Asphalt $1\mathrm{.}4$ pounds $$0\mathrm{.}10$ per pound

Direct labor $0\mathrm{.}01$ "direct labor

hour" $$19\mathrm{.}00$ per hour

Variable Manufacturing overhead $0\mathrm{.}01$ "direct labor

hour" $$2$ per hour

Fixed Manufacturing overhead $0\mathrm{.}01$ "direct labor

hour" $$10$ per hour

Total standard cost per shingle

Budgeted fixed manufacturing overhead for the period is $$60,350$

Budgeted units to be produced $600,000$ Units

Standard fixed manufacturing overhead based on expected capacity of $6000$ direct labor hours

The following information is available regarding the company's actual operations for the period.

Shingles produced $540,000$

Materials purchased:

Asphalt $765,000$ pounds $$0\mathrm{.}09$ per pound

Materials used:

Asphalt $765,000$ pounds

Direct labor: $5,300$ hours $$20\mathrm{.}00$ per hour

Manufacturing overhead incurred:

Variable $$11,660$

$$2\mathrm{.}20$ VOH rate per direct labor hour

Fixed $$60,000$

Required: Make sure you do not forget to label each variance U or F$.$ You need to use cell references for your calculations.

$1.$ Calculate the direct materials price and quantity variance.

Material price variance should be based on material purchased, since you want to isolate the variance as soon as possible.

Material Quantity variance should be based on materials used, since this is monitoring the production efficiency.

Material purchase price variance

Material Quantity variance

$2.$ Calculate the direct labor rate and efficiency variances.

Labor rate variance

Labor Efficiency variance

$3.$ Variable manufacturing overhead spending and efficiency variances.

Variable overhead spending variance

Variable overhead efficiency variance

$4.$ Fixed manufacturing overhead budget variance.

Fixed Manufacturing overhead budget variance

$5.$ Pick out the two variances that you computed above that you think should be further investigated. Explain why you picked these $2$ variances and what might be the possible cause of the variances.