Thornton Manufacturing Company produces a component part of a top secret military communication device. Standard production and cost data for the part, Product X, follow:

Planned production		28,000	units
Per unit direct materials		3.00	pounds	@	$	1.60	per pound
Per unit direct labor		2.80	hours	@	$	8.30	per hour
Total estimated fixed overhead costs	$	644,000

Thornton purchased and used 88,260 pounds of material at an average cost of $1.65 per pound. Labor usage amounted to 77,480 hours at an average of $8.38 per hour. Actual production amounted to 28,900 units. Actual fixed overhead costs amounted to $687,000. The company completed and sold all inventory for $1,920,000.

Required

1. Prepare a materials variance information table showing the standard price, the actual price, the standard quantity, and the actual quantity.
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2. Calculate the materials price and usage variances. Indicate whether the variances are favorable (F) or unfavorable (U).
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3. Prepare a labor variance information table showing the standard price, the actual price, the standard hours, and the actual hours.
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4. Calculate the labor price and usage variances. Indicate whether the variances are favorable (F) or unfavorable (U).
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5. Calculate the predetermined overhead rate, assuming that Thornton uses the number of units as the allocation base.
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6. Calculate the fixed cost spending and volume variances and indicate whether they are favorable (F) or unfavorable (U).
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7. Determine the amount of gross margin Thornton would report on the year-end income statement.
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Prepare a materials vanance information table showing the standard price, the actual price, the standard quantity, and the actual quantity. (Round ,Standard price" and "Actual price" to 2 decimal places.) Materials Variance Information Table Standard price Actual price Standard quantity for flexible budget Actual quantity used per pound per pound pounds pounds Calculate the materials price and usage variances. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None if there is no effect (ic. zero variance). Round "Price variance" to 2 decimal places.) Price variance Usage variance Prepare a labor variance information table showing the standard price, the actual price, the standard hours, and the actual hours. (Round "Standard price" and Actual price" to 2 decimal places.) Labor Variance Information Table Standard price Actual price Standard hours for flexible budget Actual hours used per hour per hour Calculate the labor price and usage variances. Indicate whether the variances are favorable (F) or unfavorable (U). (Select 'None" if there is no effect (i.c., zero variance). Round "Price variance to 2 decimal places.) Price variance Usage variance Calculate the predetermined overhead rate, assuming that Thornton uses the number of units as the allocation base. (Round your answer to 2 decimal places.) Predetermined overhead rate per unit Calculate the fixed cost spending and volume variances and indicate whether they are favorable (F) or unfavorable (U). (Select 'None" if there is no effect (i.e. zero variance).) Spending variance Volume variance Determine the amount of gross margin Thornton would report on the year-end income statement. (Round intermediate calculations to the nearest whole dollar.) ross margin