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The following information is from ABC Manufacturings static budget for 2020: Expected production and sales : 60,000 units Expected selling price per unit : $300

  1. The following information is from ABC Manufacturings static budget for 2020:

Expected production and sales : 60,000 units

Expected selling price per unit : $300

Expected variable manufacturing overhead costs : $1,800,000 ($15/direct

manufacturing labour hour,

120,000 hours)

Expexted total fixed manufacturing costs : $2,500,000

Standard quantities, standard prices, and standard unit costs follow for direct materials and direct manufacturing labor:

Standard Quantity

Standard Price

Standard Unit Cost

Direct materials

4 kgs

$25 per kg

$100

Direct manufacturing labor

2 hours

$25 per hour

$50

During 2020, actual number of units produced and sold was 50,000, at an average selling price of $310. Actual cost of direct materials used was $5,040,000, based on 210,000 kgs purchased at $24 per kg. Direct manufacturing labor-hours actually used were 105,000, at the rate of $26 per hour. As a result, actual direct manufacturing labor costs were $2,730,000. Actual variable overhead costs were $1,680,000 and actual fixed costs were $2,450,000. There were no beginning or ending inventories.

  1. Compute price and efficiency variances for direct materials and direct manufacturing labor.

Direct Materials Price Varience

Direct Materials Efficiency Varience

Direct Labor Price Varience

Direct Labor Efficiency Varience

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