Problem 21-4B Computing materials, labor, and overhead variances P3 P4 Kryll Company set the following standard costs per unit for its single product. Direct materials (25 lbs. @ $4 per lb.).. Direct labor (6 hrs. $8 per hr.). Variable overhead (6 hrs. $5 per hr). Fixed overhead (6 hrs. @ $7 per hr). Standard cost per unit $100 48 30 42 $220 Overhead is applied using direct labor hours. The standard overhead rate is based on a predicted activity level of 80% of the company's capacity of 60,000 units per quarter. The following additional information is available. Capacity Lovel 70% 80% 90% Production (in units) 42,000 units 48,000 units 54,000 units Standard direct labor hours (6 DLH/unit) 252,000 hrs. 288,000 hrs. 324,000 hrs. Budgeted overhead (flexible budget) Fixed overhead. $2,016,000 $2,016,000 $2,016,000 Variable overhead. $1,260,000 $1,440,000 $1,620,000 During the current quarter, the company operated at 70% of capacity and produced 42,000 units; direct labor hours worked were 250,000. Units produced were assigned the following standard costs. Direct materials (1,050,000 lbs. @$4 per lb.). Direct labor (252.000 hrs. @ $8 per hr.).. Overhead (252,000 hrs. @$12 per hr.).. Standard (budgeted) cost... Actual costs incurred during the current quarter follow. Direct materials (1,000,000 lbs. $4.25 per lb.) Direct labor (250.000 hrs. $7.75 por br. $4,200,000 2,016,000 3,024,000 $9.240.000 $4,250,000 1,937,500 +000 00 Direct materials (1,050,000 lbs. $4 per lb). Direct labor (252,000 hrs. $8 per hr).. Overhead (252.000 hrs. @$12 per he). Standard (budgeted) cost. Actual costs incurred during the current quarter follow. $4,200,000 2,016,000 3,024,000 $9,240,000 Direct materials (1,000,000 lbs. $4.25 per lb) Direct labor (250,000 hrs. $7.75 per hr). $4,250,000 1.937,500 Fixed overhead.... 1.960,000 Variable overhead. 1,200,000 Actual cost $9,347,500 Required 1. Compute the direct materials variance, including its price and quantity variances. 2. Compute the direct labor variance, including its rate and efficiency variances. 3. Compute the overhead controllable and volume variances.