Question 27 At the end of June, the manager of the B.C. manufacturing plant was provided with the following variance analysis report. Favourable (F)/ Unfavourable (U) Budget 310,000 Actual 323,000 Variance 13,000 Production in units Production costs: Direct material Direct labour Variable overhead costs Fixed overhead costs Total production costs $742,109 1,395,000 131,750 147,250 $2,416,109 $749,581 1,420,440 135,821 139,870 $2,445,712 $(7,472) (25,440) (4,071) 7,380 $(29,603) The manager immediately called the production supervisor, demanding an explanation for the large unfavourable variance for the quarter. The production supervisor was puzzled. He thought the cost-cutting measures they had incorporated were beginning to work. He certainly wasn't expecting such a large discrepancy. The standard rates the plant was using with its normal costing system are summarized below. Volume Cost 1.40 kg per unit $1.70 per kg 0.25 hour per unit $18.00 per hour Direct material Direct labour Predetermined overhead rate: Variable 0.25 hour per unit 0.25 hour per unit $1.70 per hour $1.90 per hour Fixed Other relevant information: 1. 2. 3. A total of 460,000 kg of direct materials were purchased during the quarter at a cost of $1.90 per kilogram. A total of 440,930 kg of direct materials were used in production to manufacture 323,000 units. Payroll recorded 79,800 direct labour hours at an average cost of $17.80 per hour. (a1) Calculate the following production variances. Material price variance Material quantity variancet Labour price variance Labour efficiency variance Variable overhead variance