Variance Analysis (10pts): Exterminate, Inc. has provided the following standards data concerning one of their products. Assume that OH costs are applied to products based on direct labor (DL) hours.

Inputs	Standard quantity or standard hours of input per unit of output	Standard price or rate per unit of input
Direct materials	4.0 liters	$7.25 per liter
Direct labor	2.2 DL hours	$18.00 per DL hour
Variable overhead	2.2 DL hours	$2.50 per DL hour
Fixed overhead	2.2 DL hours	$4.00 per DL hour

The standard OH rate for both Variable OH ($2.50 per DL hour) and Fixed OH ($4.00 per DL hour) is based on an expected volume of 85% of the factorys capacity of 8,000 units per month. Per the firms flexible OH budget, the Budgeted OH costs per month at the 75%, 85%, and 95% capacity level are:

	Operating levels (% of capacity)
	75%	85%	95%
Units of production	6,000	6,800	7,600
Standard DL hours	13,200	14,960	16,720
Budgeted OH Costs:
Variable OH	$33,000	$37,400	$41,800
Fixed OH	$59,840	$59,840	$59,840
Total OH	$92,840	$97,240	$101,640

The firm reported the following actual costs for the month of May when it operated at 75% of capacity, producing 6,000 units.

Actual output	6,000 units
Direct materials purchased and used	23,400 liters
Actual cost of materials purchased	$173,160
Actual direct labor hours used	13,600
Actual direct labor cost	$224,400
Actual variable overhead cost	$34,680
Actual fixed overhead cost	$59,000

1. Calculate the DM price variance. Indicate whether this variance is favorable (F) or unfavorable (U).
2. Calculate the DM quantity variance. Indicate whether this variance is favorable (F) or unfavorable (U).
3. Calculate the DM cost variance. Indicate whether this variance is favorable (F) or unfavorable (U).
4. Calculate the DL rate variance. Indicate whether this variance is favorable (F) or unfavorable (U).
5. Calculate the DL efficiency variance. Indicate whether this variance is favorable (F) or unfavorable (U).
6. Calculate the DL cost variance. Indicate whether this variance is favorable (F) or unfavorable (U).
7. Calculate the Variable OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U).
8. Calculate the Fixed OH Volume Variance. Indicate whether this variance is favorable (F) or unfavorable (U).
9. Calculate the Fixed OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U).
10. Calculate the Total OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U).