Piedmont Manufacturing Variances

Piedmont Manufacturing produces metal products with the following standard quantity and cost information:

Direct Materials
	Unit	Quantity	Rate	Total
Aluminum	sheet	4	$4	$16
Copper	sheet	3	$8	$24
Direct Labor	hour	7	$16	$112
Variable overhead	machine hour	5	$6	$30
Fixed overhead	machine hour	5	$4	$20

Overhead rates were based on normal monthly capacity of 6,000 machine hours.

During November, the company produced only 850 units because of a labor strike, which occurred during union contract negotiations. After the dispute was settled, the company scheduled overtime to try to meet regular production levels. The following costs were incurred in November:

Direct Materials	Unit	Quantity	Rate	Used
Aluminum	sheet	4,000	$3.80	3,500
Copper	sheet	3,000	$8.40	2,600

Direct Labor			Hours	Rate
Regular time, pre-contract settlement			5,200	$16
Regular time, post-contract settlement			900	$17

Overhead, based on 4,175 machine hours	Total
Variable overhead	$23,300
Fixed overhead	$18,850

Instructions: Using formulas/functions wherever possible, complete the following...

1. On the Worksheet tab, determine the following variances for November including whether each is favorable or unfavorable.

1. Total material price variance
2. Total material usage (quantity) variance
3. Labor rate variance
4. Labor efficiency variance
5. Variable overhead spending variance
6. Variable overhead efficiency variance
7. Fixed overhead spending variance
8. Volume variance
9. Budget variance

2. Prepare the journal entries to record the standard costing information for November using the information from Part 1.