Question
Producer Company's standard and actual cost per unit for the most recent period, during which 30,000 units were actually produced, are given below: Raw Materials:
Producer Company's standard and actual cost per unit for the most recent period, during which 30,000 units were actually produced, are given below:
Raw Materials:
Standard useage and price - 2 feet per unit at $8.45 per foot
Actual usage - 64,000 feet
Purchased - 64,000 feet at $8.55 per foot
Direct Labor:
Standard hours and rate - 1.4 hours per unit at $16.00 per hours
Actual total direct labor - $687,300
Actual hours used - 43,5000 hours
Variable Overhead:
Standard application rate - $2.50 per direct labor hour
Actual variable overhead - $108,000
Fixed Overhead:
Budgeted - $210,000
Actual - $211,800
Standard application rate - $6.00 per direct labor hour
From the information, compute the following variances AND indicate whether the variance is favorable or unfavorable:
a. Material price variance
b. Material quantity variance
c. direct labor rate variance
d. direct labor efficiency variance
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