Problem 6-30 (Part Level Submission) Lexi Belcher picked up the monthly report that Irvin Santamaria left on her desk. She smiled as her eyes went straight to the bottom line of the report and saw the favorable variance for operating income, confirming her decision to push the workers to get those last 320 cases off the production line before the end of the month. But as she glanced over the rest of numbers, Lexi couldn?t help but wonder if there were errors in some of the line items. She was puzzled how most of the operating expenses could be higher than the budget since she had worked hard to manage the production line to improve efficiency and reduce costs. Yet the report, shown below, showed a different story.

Actual	Budget	Variance
Cases produced and sold	10,250	9,930	320	Favorable
Sales revenue	$1,933,900	$1,856,900	$77,000	Favorable
Direct material	557,073	546,150	10,923	Unfavorable
Direct labor	265,776	258,180	7,596	Unfavorable
Variable manufacturing overhead	283,017	278,040	4,977	Unfavorable
Variable selling expenses	92,478	89,370	3,108	Unfavorable
Variable administrative expenses	41,448	39,720	1,728	Unfavorable
Contribution margin	694,108	645,440	48,668	Favorable
Fixed manufacturing overhead	110,223	109,230	993	Unfavorable
Fixed selling expenses	69,014	69,510	496	Favorable
Fixed administrative expenses	128,891	129,090	199	Favorable
Operating income	$385,980	$337,610	$48,370	Favorable

Lexi picked up the phone and called Irvin. ?Irvin, I don?t get it. We beat the budgeted operating income for the month, but look at all the unfavorable variances on the operating costs. Can you help me understand what?s going on?? ?Let me look into it and I?ll get back to you,? Irvin replied. Irvin gathered the following additional information about the month?s performance.

?	Direct materials purchased: 101,286 pounds at a total of $557,073
?	Direct materials used: 101,286 pounds
?	Direct labor hours worked: 26,315 at a total cost of $265,776
?	Machine hours used: 40,663

Irvin also found the standard cost card for a case of product.

Standard Price	Standard Quantity	Standard Cost
Direct materials	$5.5 per pound	10 pounds	$55
Direct labor	$10 per DLH	2.58 DLH	25.80
Variable overhead	$7 per MH	4 MH	28.00
Fixed overhead	$2.73 per MH	4 MH	10.92
Total standard cost per case	$119.72

(a-g)(a-b)Calculate the direct material price variance and direct material quantity variance for the month.(If variance is zero, select "Not Applicable" and enter 0 for the amounts.)

Direct material price variance	$	Not ApplicableFavorableUnfavorable
Direct material quantity variance	$	UnfavorableFavorableNot Applicable

(c-d)Calculate the direct labor rate variance and direct labor efficiency variance for the month.(Round answers to 0 decimal places, e.g. 1525. If variance is zero, select "Not Applicable" and enter 0 for the amounts.)

Direct labor rate variance	$	UnfavorableFavorableNot Applicable
Direct labor efficiency variance	$	UnfavorableNot ApplicableFavorable

(e-f)Calculate the variable overhead spending variance and variable overhead efficiency variance for the month.(If variance is zero, select "Not Applicable" and enter 0 for the amounts.)

Variable overhead spending variance	$	Not ApplicableFavorableUnfavorable
Variable overhead efficiency variance	$	Not ApplicableFavorableUnfavorable

(g)Calculate the fixed overhead spending variance for the month.(If variance is zero, select "Not Applicable" and enter 0 for the amounts.)

Fixed overhead spending variance$

Not ApplicableFavorableUnfavorable

Problem 6-30 (Part Level Submission) Lexi Belcher picked up the monthly report that Irvin Santamaria left on her desk. She smiled as her eyes went straight to the bottom line of the report and saw the favorable variance for operating income, confirming her decision to push the workers to get those last 320 cases off the production line before the end of the month. But as she glanced over the rest of numbers, Lexi couldn't help but wonder if there were errors in some of the line items. She was puzzled how most of the operating expenses could be higher than the budget since she had worked hard to manage the production line to improve efficiency and reduce costs. Yet the report, shown below, showed a different story. Actual Cases produced and sold Budget Variance 10,250 9,930 320 Favorable $1,933,900 $1,856,900 $77,000 Favorable Direct material 557,073 546,150 10,923 Direct labor 265,776 258,180 7,596 Variable manufacturing overhead 283,017 278,040 4,977 Variable selling expenses 92,478 89,370 3,108 Variable administrative expenses 41,448 39,720 1,728 Contribution margin 694,108 645,440 Fixed manufacturing overhead 110,223 109,230 69,014 69,510 Sales revenue Fixed selling expenses Fixed administrative expenses Operating income Unfavorabl e Unfavorabl e Unfavorabl e Unfavorabl e Unfavorabl e 48,668 Favorable 993 Unfavorabl e 496 Favorable 128,891 129,090 199 Favorable $385,980 $337,610 $48,370 Favorable Lexi picked up the phone and called Irvin. \"Irvin, I don't get it. We beat the budgeted operating income for the month, but look at all the unfavorable variances on the operating costs. Can you help me understand what's going on?\" \"Let me look into it and I'll get back to you,\" Irvin replied. Irvin gathered the following additional information about the month's performance. Direct materials purchased: 101,286 pounds at a total of $557,073 Direct materials used: 101,286 pounds Direct labor hours worked: 26,315 at a total cost of $265,776 Machine hours used: 40,663 Irvin also found the standard cost card for a case of product. Standard Price Standard Quantity Standard Cost Direct materials $5.5 per pound 10 pounds Direct labor $10 per DLH 2.58 DLH 25.80 Variable overhead $7 per MH 4 MH 28.00 $55 Fixed overhead $2.73 per MH Total standard cost per case 4 MH 10.92 $119.72 (a-g) (a-b) Calculate the direct material price variance and direct material quantity variance for the month. (If variance is zero, select "Not Applicable" and enter 0 for the amounts.) $ Direct material price variance $ Direct material quantity variance (c-d) Calculate the direct labor rate variance and direct labor efficiency variance for the month. (Round answers to 0 decimal places, e.g. 1525. If variance is zero, select "Not Applicable" and enter 0 for the amounts.) $ Direct labor rate variance $ Direct labor efficiency variance (e-f) Calculate the variable overhead spending variance and variable overhead efficiency variance for the month. (If variance is zero, select "Not Applicable" and enter 0 for the amounts.) $ Variable overhead spending variance $ Variable overhead efficiency variance (g) Calculate the fixed overhead spending variance for the month. (If variance is zero, select "Not Applicable" and enter 0 for the amounts.) $ Fixed overhead spending variance