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Problem 4 Comprehensive Variance Analysis Hellx Company produces several products in its factory, including a karate robe. The company uses a standard cost system to
Problem 4 Comprehensive Variance Analysis Hellx Company produces several products in its factory, including a karate robe. The company uses a standard cost system to assist in the control of costs. According to the standards that have been set for the robes, the factory has a denominator activity level of 780 direct labour-hours each month, which should result in the production of 1,950 robes. The standard costs associated with this level of production are as follows: Per Unit of Product Total $35,490 $18.20 $7,020 Direct materials Direct labour Variable manufacturing overhead $2,340 Fixed manufacturing overhead 3.60 1.20 2.40 $25.40 $ 4,680 Based on direct labour-hours During April, the factory worked only 760 direct labour-hours and produced 2,000 robes. The following actual costs were recorded during the month: Per Unit of Product Total Direct materials (6,000 metres) Direct labour Variable manufacturing overhead $36,000 $18.00 3.80 1.90 2.30 $26.00 $7,600 Fxed manufacturing overhead$460022 0 At standard, each robe should require 2.8 metres of material. All of the materials purchased during the month were used in production. Required: Compute the following variances for April: 1. The materials price and quantity variances. 2. The labour rate and efficiency variances. 3. The variable manufacturing overhead spending and efficiency variances. 4. The fixed manufacturing overhead budget and volume variances
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