SW has developed the following standards for one of its products:<\/p>
<\/p>
STANDARD VARIABLE COST CARD<\/strong><\/p> ONE UNIT OF PRODUCT<\/strong><\/p> <\/p> <\/p> Direct materials: 20 square feet<\/p> $100.00<\/p> Direct labour:$7 per hour<\/p> 28.00<\/p> Variable overhead: 4 hours <\/p> 16.00<\/u><\/p> Total standard variable cost per unit<\/p> $144.00<\/u><\/p> The company records materials price variances at the time of purchase.<\/p> The following activities relate to the month of April:<\/p> <\/p> Actual Materials purchased<\/p> 90,000 square feet at$6.10 persq. foot<\/p> Actual Materials used<\/p> 82,000 square feet<\/p> Actual units sold<\/p> 6,000 units<\/p> Actual Units produced<\/p> 4,200 units<\/p> Budgeted units<\/p> 4,500 units<\/p> Actual Direct labour<\/p> 15,500 hours at $6.25 per hour<\/p> Actual Variable overhead<\/p> $59,000<\/p> <\/p> Required<\/u>:<\/p> a. Calculate material price variance and indicate whether it is favorable or unfavorable(2 Marks)<\/p> a.Calculate the labour efficiency variance and indicate whether it is favorable or unfavorable.(2 Marks)<\/p> b.Calculate the variable overhead spending variance and indicate whether it is favorable or unfavorable. (2 Marks)<\/p> c.Calculate the variable overhead efficiency variance and indicate whether it is favorable or unfavorable. (2 Marks)<\/p>",
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