Stewart Corporation makes a product with the following standard costs Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 9 3 pounds $8 00 per pound $74 40 Direct labor 0 4 hours $19 00 per hour $7 60 Variable overhead 0 4 hours $7 00 per hour $2 80 The company reported the following results concerning this product in August Originally budgeted output 3,000 units Actual output 3,100 units Raw materials used in production 30,370 pounds Purchases of raw materials 33,900 pounds Actual direct labor hours 1,340 hours Actual cost of raw materials purchases $264,420 Actual direct labor cost $27,872 Actual variable overhead cost $8,844 The company applies variable overhead on the basis of direct labor hours The direct materials purchases variance is computed when the materials are purchased Required a Compute the materials quantity variance b Compute the materials price variance c Compute the labor efficiency variance d Compute the labor rate variance e Compute the variable overhead efficiency variance f Compute the variable overhead rate variance

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Posted on Aug 11, 2024

Stewart Corporation makes a product with the following standard costs: Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit Direct materials 9.3

Stewart Corporation makes a product with the following standard costs:

	Standard Quantity or Hours	Standard Price or Rate	Standard Cost Per Unit
Direct materials	9.3 pounds	$8.00 per pound	$74.40
Direct labor	0.4 hours	$19.00 per hour	$7.60
Variable overhead	0.4 hours	$7.00 per hour	$2.80

The company reported the following results concerning this product in August.

Originally budgeted output	3,000	units
Actual output	3,100	units
Raw materials used in production	30,370	pounds
Purchases of raw materials	33,900	pounds
Actual direct labor-hours	1,340	hours
Actual cost of raw materials purchases	$264,420
Actual direct labor cost	$27,872
Actual variable overhead cost	$8,844

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

Required:

a. Compute the materials quantity variance. b. Compute the materials price variance. c. Compute the labor efficiency variance. d. Compute the labor rate variance. e. Compute the variable overhead efficiency variance. f. Compute the variable overhead rate variance.