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 (0) Budget 306,000 Actual 323,000 Variance 17,000 Production in units Production costs: Direct material Direct labour Variable overhead costs Fixed overhead costs Total production costs $643,849 1,224,000 145,350 175,950 $2,189,149 $653,125 1,262,420 152,052 172,170 $2,239,767 $(9,276) (38,420) (6,702) 3,780 $(50,618) 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 1.10 kg per unit $1.90 per kg 0.25 hour per unit $16.00 per hour Direct material Direct labour Predetermined overhead rate: Variable Fixed 0.25 hour per unit 0.25 hour per unit $1.90 per hour $2.30 per hour Other relevant information: 1. 2. 3. A total of 363,000 kg of direct materials were purchased during the quarter at a cost of $1.95 per kilogram. A total of 343,750 kg of direct materials were used in production to manufacture 323,000 units. Payroll recorded 79,900 direct labour hours at an average cost of $15.80 per hour. (al) Calculate the following production variances. Material price variance 17185.50 Unfavourable Material quantity variance Labour price variance Labour efficiency variance Variable overhead variance