Question
Ralston Inc. has provided the following information. Use it to answer 1-4. Give all variances as a positive number. Round ONLY your final answer to
Ralston Inc. has provided the following information. Use it to answer 1-4. Give all variances as a positive number. Round ONLY your final answer to dollars. Also,
Denote whether each variance above was favorable or unfavorable.
Standards:
Direct materials: 10 lb @ $2.60/lb 26.00 per unit
Direct labor: 2 hours @ $22.50/hour 45.00 per unit
Variable overhead: 2 hours @ $18.00/hour 36.00 per unit
Fixed overhead 25.00 per unit
total: 132.00 per unit
Budgeted production = 7,000 units
Actual results
Materials purchased: 74,950 lbs $192,200
Materials used: 74,600 lbs
Direct labor: 15,530 actual hours $339,500
Variable overhead: $286,600
Fixed overhead: $171,400
Units produced: 7,400 units
1. Calculate the direct material quantity variance.
2. Compute the direct labor rate variance. Round ONLY your final answer.
3. Calculate variable overhead rate variance. Round ONLY your final answer.
4. Compute the variable efficiency variance.
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