PROBLEM III

Hawley, Inc. manufactures Product S for national distribution. The standard costs for the manufacture of Product S were as follows:

Standard Costs Actual Costs

Direct materials 1,500 pounds at $35 1,600 pounds at $32

Direct labor 4,800 hours at $11 4,500 hours at $11.80

Factory overhead Rates per labor hour

Based on 100% of normal

Capacity of 5,500 labor hours:

Variable cost, $2.40 $12,300 variable cost

Fixed costs, $3.50 $19,250 fixed cost

Instructions

1. Determine the quantity variance, price variance, and total direct materials cost variance for Product S.

2. Determine the time variance, rate variance, and total direct labor cost variance for Product S.

Using the information from Problem III

1. Determine the controllable variance, volume variance, and total factory overhead cost variance for Product S