Question 1

Chisholm Company produces several products, including a karate robe. The company uses a standard cost system to assist in cost control. According to the standards that have been set for the robes, the factory has a denominator level of activity of 780 direct labour hours which should result in the production of 1,950 robes. The standard costs associated with this level of production are as follows:

	Total	$ per unit of product
Direct materials	$35,490	$18.20
Direct labour	7,020	3.60
Variable manufacturing overhead*	2,340	1.20
Fixed manufacturing overhead*	4,680	2.40
		$25.40

* Based on direct labour hours

During May, the factory worked only 760 direct labour hours and produced 2,000 robes. The following actual costs were recorded during the month:

	Total	$ per unit of product
Direct materials (6,000 metres)	$36,000	$18.00
Direct labour	7,600	3.80
Variable manufacturing overhead*	3,800	1.90
Fixed manufacturing overhead*	4,600	2.30
		$26.00

At standard, each robe should require 2.80 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 rate and usage/efficiency variances
2. The labour rate and efficiency variances
3. The variable manufacturing overhead spending and efficiency variances
4. The fixed overhead budget and volume variances