Standard Job Order Costing -
	Variance Analysis
Special order lamps are manufactured in division S. Because of the precise nature of the process a
standard cost system has been developed. The following standards are used for the special orders:
		Standards
	Lamp Kits				$16.000000	per lamp
	Direct Labor				2.400000	per lamp (4 lamps/hr.)
	Variable Overhead				0.250000	per lamp (4 lamps/hr.)
**	Fixed Overhead				10.000000	per lamp
	Total				$28.650000
	** Fixed overhead is based on expected production of 4,012 customized lamps each month.
To keep records of the actual cost of a job, a Job Order Cost System has been developed. Entries
are made to the Job Order System at actual cost (overhead is applied based on actual labor hours)
while entries are made to the accounting system at standard. Variance analysis is used to analyze the
differences.
Job Order Costing Section
On January 1, 20x2, Division S began Job 1101 for the Client, THE BIG CHILDREN STORE. The
job called for 4,000 customized lamps. The following set of transactions occurred from
January 5 until the job was completed:
	5-Jan	Purchased 4,100 Lamp Kits @ $16.70 per kit.
	9-Jan	4,100 sets of Lamp Kits were requisitioned.
	17-Jan	Payroll of 610 Direct Labor Hours @ $9.75 per hour.
	30-Jan	Payroll of 660 Direct Labor Hours @ $10.00 per hour.
	30-Jan	3,988 lamps were completed and shipped. All materials requisitioned were
		used or scrapped.

Month End Overhead Information

Actual Variable Overhead

$ 1,447.80

Actual Fixed Overhead

$ 40,623.45

How many Lamps were completed?

Note: Show favorable variances as negative numbers

What was the total material price variance for the Lamp Kits purchased?

What was the material usage variance for Lamp Kits?

What was the direct labor efficiency variance ?

What was the direct labor rate variance?