Question
The standards for one case of liquid weed killer are: Direct materials 5 lbs @ $ 6.80/lb Direct labor 2.4 hrs @ $14.00/hr Variable overhead
The standards for one case of liquid weed killer are:
Direct materials | 5 lbs @ $ 6.80/lb | |
Direct labor | 2.4 hrs @ $14.00/hr | |
Variable overhead (based on machine hours) | 1.5 hrs @ $ 4.50/hr | |
During the week ended May 6, the following activity took place: |
2,910 machine hours were worked. |
11,400 lb of raw material were purchased for inventory at a total cost of $80,940. |
1,900 cases of finished product were produced. |
9,260 lb of raw material were used. |
4,420 labor hours were worked at an average rate of $14.35 per hour. |
$12,513 actual variable overhead costs were incurred. |
Required: |
Calculate each of the following variances and provide plausible explanations for the results: (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) |
A. Price variance for raw materials purchase
B. raw materials usage variance
C. Direct labor rate variance
D. Direct labor efficiency variance
E. Variable overhead spending variance
F. Variable overhead efficiency variance
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