Stephen Roget, a financial analyst for Croton Industries, Inc., has been given information with respect to standard cost variances for one of the plants. These variances are given below.

Materials quantity variance . . . . . . . . $ 7,000 favourable

Labour rate variance . . . . . . . . . . . . 4,000 favourable

Labour efficiency variance . . . . . . . . . 12,000 unfavourable

Factory overhead spending variance . . . . . . . . . 12,000 unfavourable

Factory overhead spending variance. . . . . . . . . 3,000 favourable

Factory overhead efficiency variance. . . . . . . . . 6,000 unfavourable

Factory overhead volume variance . . . . . . . . . 50,000 favourable

He has determined that the company has manufactured 50,000 units of product with standard costs as follows:

Direct materials . . . . . . . . . . . . . $ 700,000

* Direct labour . . . . . . . . . . . . . . . 300,000

Variable factory overhead . . . . . . . .. 150,000

Fixed factory overhead . . . . . . . . . . 250,000

Total standard cost $ 1,400,000

* Standard labour time per product unit is 30 minutes.

The actual fixed factory overhead was equal to the master budgeted fixed factory overhead. Roget would like to use the variances to develop some of the cost data for the fiscal period.

REQUIRED: SHOW YOUR COMPUTATIONS.

1. How many units of product should be manufactured at the master budget capacity?

2. Determine the total fixed factory overhead for the master budget.

3. How many direct labour hours should have been used to manufacture 50,000 units of product?

4. How many direct labour hours were used?

5. What were the total actual costs of direct labour?

6. What were the total standard costs of the direct materials used in production?

7. What was the actual variable factory overhead cost?

8. What was the budget variable factory overhead for actual time used to manufacture the 50,000 units of product?

9. What was the budget variable factory overhead for the required time to manufacture the 50,000 units of product?