Quivers Inc. began operations on January 1 of the current year. The company produces eight-ounce bottles of jet wax called Ophelia Shine. The wax is sold wholesale in 12-bottle cases for $100 per case. There is a seling commission of $20 per case. The January direct materials, direct labor and factory overhead costs are as Cost per Unit DIRECT MATERIALS Cost Units Behavior per Case Variable 100 oz. Variable 30 oz. Variable 12 bottles Cream base Natural oils Bottle (8-02) $0.02 Direct Materials Cost per Case $ 2.00 9.00 6.00 $17.00 0.30 0.50 Department Mixing Filling Cost Behavior Variable Variable DIRECTLABOR Time per Case 20 min. 5 25 min Labor Rate Per Hour $18.00 14.40 Direct Labor Cost per Case $6.00 120 5720 FACTORY OVERHEAD Cost Behavior Total Cost Utilities Mixed $ 600 Facility lease Fixed 14,000 Equipment depreciation Fixed 4,300 Supplies Fixed 660 $19,560 Part C. August Variance Analysis During September of the current year, Robin was asked to perform variance analyses for August. The January operating data provided the standard prices, rates, times, and quantities per case. There were 1,500 actual cases produced during August, which was 250 more cases than planned at the beginning of the month. Actual data for August were as follows: Material Actual Direct Actual Direct Materials Materials Quantity per Price per Unit Case $ 0.016 102 Cream Base (oz.) Natural Oils (oz.) Bottles $ 0.32 31 $ 0.42 12.5 Activity Actual Direct Actual Direct Labor Time Labor Rate per Case (minutes) $ 18.20 19.50 $ 14.00 5.60 Mixing Filling Actual Variable Overhead Normal Volume (Cases) 305.00 1,600 Requirement #10: Determine the direct materials variance. Bottles Direct Materials Price Variance Cream Base Natural Oils Actual Price Standard Price Difference Actual Quantity (Units) Direct Materials Price Variance Decision Actual Quantity Cream Base Natural Oils Bottles Cases Amount Total Analysis Bottles Direct Materials Quantity Variance Cream Base Natural Oils Actual Quantiy Standard Quantity Difference * Standard Price Direct Materials Quantity Variance Decision Standard Quantity Cream Base Natural Oils Bottles Cases Amount Total Analysis Requirement #11: Determine the direct labor variance. Filling Direct Labor Rate Variance Mixing Filling Department Department Actual Rate Standard Rate Difference * Actual Time (Hours) Direct Labor Rate Variance Decision Actual Time Mixing Units Minutes Hours Total Analysis Direct Labor Time Variance Mixing Filling Department Department Actual Time Standard Time Difference Standard Rate Direct Labor Time Variance Decision Standard Time Mixing Filling Units Minutes Hours Total Analysis Requirement #12: Determine the factory overhead variance. Variance overhead (utility cost) at standard cost Cases Factory Overhead Controllable Variance Actual variable overhead Variable overhead at standard cost Factory overhead controllable variance Decision Total fixed factory overhead Total Factory Overhead Volume Variance Normal volume (cases) Actual volume (cases) Difference * Fixed factory overhead rate $0.00 Decision Fixed factory overhead rate Cases Total fixed factory overhead Total Analysis
