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 300,000 Actual 319,000 Variance 19,000 Production in units F > > Production costs: Direct material Direct labour Variable overhead costs Fixed overhead costs Total production costs $598,309 1,350,000 135,000 142,500 $2,225,809 $611,136 1,402,195 142,124 137,970 $2,293,425 $(12,827) (52,195) (7,124) 4,530 $(67,616) > 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 $1.80 per kg 0.25 hour per unit $18.00 per hour Direct material Direct labour Predetermined overhead rate: Variable Fixed 0.25 hour per unit 0.25 hour per unit $1.80 per hour $1.90 per hour Other relevant information: 1. 2. 3. A total of 359,000 kg of direct materials were purchased during the quarter at a cost of $1.85 per kilogram. A total of 339,520 kg of direct materials were used in production to manufacture 319,000 units. Payroll recorded 78,775 direct labour hours at an average cost of $17.80 per hour. (a1) Calculate the following production variances. Material price variance 4 Material quantity variance 4 Labour price variance Labour efficiency variance 4 Variable overhead variance 4