Question 4

A.(i) Moment Inc. provides the following data for June 2016 when 15,000 Units are manufactured:

Standard Material Cost (Per Unit)

8.50 kg @ $ 7.50/kg

Actual Material Cost (Per Unit)

6.75 kg @ $ 13.5/kg

StandardLabor cost (Per Unit)

5.5 hrs @ $ 15/hr

Actual Labor cost (Per Unit)

6.5 hrs @ $ 12.2/hr

Calculate:

Direct Material Price Variance

Direct Material Quantity/Usage Variance

Total Material Cost Variance

Direct Labor Rate Variance

Direct Labor Efficiency Variance

Total Labor Cost Variance

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(ii) Calculate Variable Overhead Spending Variance if actual labor hours used are 260,standard variable overhead rate is $10.40 per direct labor hour and actual variable overhead rate is $9.30 per direct labor hour. Also specify whether the variance is favorable or unfavorable.

(iii) Calculate the variable overhead efficiency variance using the following figures:

Number of Units Produced	620
Standard Direct Labor Hours Per Unit	0.2
Actual Direct Labor Hours Used	260
Standard Variable Overhead Rate	$10.40

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