Question 27 At the end of June, the manager of the B.C. manufacturing plant was provided with the following variance analysis report. Budget 342,000 Actual 360,000 Variance 18,000 Favourable (F)/ Unfavourable (0) F Production in units Production costs: Direct material Direct labour Variable overhead costs Fixed overhead costs Total production costs $1,057,669 1,111,500 188,100 179,550 $2,536,819 $1,082,928 1,140,480 196,522 175,445 $2,595,375 $(25,259) (28,980) (8,422) 4,105 $(58,556) cccc 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 $2.20 per kg 0.25 hour per unit $13.00 per hour Direct material Direct labour Predetermined overhead rate: Variable Fixed 0.25 hour per unit 0.25 hour per unit $2.20 per hour $2.10 per hour Other relevant information: 1. 2. 3. A total of 511,000 kg of direct materials were purchased during the quarter at a cost of $2.40 per kilogram. A total of 492,240 kg of direct materials were used in production to manufacture 360,000 units. Payroll recorded 89,100 direct labour hours at an average cost of $12.80 per hour. (a1) Calculate the following production variances. Material price variance Material quantity variance 4 Labour price variance 4 Labour efficiency variance & Variable overhead variance