Practice Quiz - Standard Cost ABC Company manufactures tires. Standard and actual costs for the manufacture of 5,500 tires were as follows: Direct Materials Standard 82,000 lbs. @ $5.10 Actual 82,600 lbs. @ $5.00 Direct Labor Standard 1,650 hrs. @ $17.50 Actual 1,680 hrs. @ $17.40 Factory Overhead Standard: FOH rates per DL hour based on 100% normal capacity of 1,500 DL hours Variable 3.10$ Fixed 4.90$ Actual: Variable $5,000 Each tire requires 0.3 hr. of DL Required: 1. Calculate the following variances: A. DM (price, quantity, total) B. DL (rate, time, total) C. FOH (variable, fixed) 2. Provide a hypothetical example which would explain the DM and DL variances above: DM Price and Quantity DL Rate and Time 3. For the FOH Fixed (volume) variance: A. What was the Actual number of tires produced vs. Budgeted number of tires? B. Calculate Budgeted Fixed FOH/Actual Units vs. Budgeted Fixed FOH/Budgeted Units C. Explain why the Fixed FOH variance was favorable or unfavorable