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 332,000 Actual 345,000 Variance 13,000 Production in units Production costs: Direct material Direct labour Variable overhead casts Fixed overhead costs Total production costs $1,000,309 1,411,000 166,000 174,300 $2,751,609 $1,011,940 1,434,300 171,090 167,570 $2,784,900 $(11,631) (23,300) (5,090) 6 ,730 $(33,291) 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 1.50 kg per unit $2.00 per kg 0.25 hour per unit $17.00 per hour Direct material Direct labour Predetermined overhead rate: Variable Fixed 0.25 hour per unit $2.00 per hour 0.25 hour per unit $2.10 per hour Other relevant information: 1. 2. 3. A total of 525,000 kg of direct materials were purchased during the quarter at a cost of $2.05 per kilogram. A total of 505,970 kg of direct materials were used in production to manufacture 345,000 units. Payroll recorded 85,375 direct labour hours at an average cost of $16.80 per hour. (a1) Calculate the following production variances. Material price variance Material quantity varianced Labour price variance Labour efficiency variance Variable overhead variance