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)/ Budget Actual Variance Unfavourable (0) Production in units 338,000 351,000 13,000 Production costs: Direct material $896,629 $899,592 $(2,963) Direct labour 1,183,000 1,197,150 (14,150) Variable overhead costs 202,800 209,135 (6,335) Fixed overhead costs 202,800 197,045 5,755 Total production costs $2,485,229 $2,502,922 $(17,693) 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. DUD The standard rates the plant was using with its normal costing system are summarized below. Volume Cost 1.10 kg per unit $2.40 per kg 0.25 hour per unit $14.00 per hour Direct material Direct labour Predetermined overhead rate: Variable Fixed 0.25 hour per unit 0.25 hour per unit $2.40 per hour $2.40 per hour Other relevant information: 1. 2. 3. A total of 394,000 kg of direct materials were purchased during the quarter at a cost of $2.45 per kilogram. A total of 374,830 kg of direct materials were used in production to manufacture 351,000 units. Payroll recorded 86,750 direct labour hours at an average cost of $13.80 per hour. (al) Calculate the following production variances Material price variance Material quantity variance Labour price variance Labour efficiency variance Variable overhead variance