Variance Analysis (6pts): Waterfall, 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 5.0 Ounces $3.25 Per ounce Direct labor 2.2 DL hours $10.00 Per DL hour Variable overhead 2.2 DL hours $4.75 Per DL hour Fixed overhead 2.2 DL hours $1.90 Per DL hour The standard OH rate for both Variable OH ($4.75 per DL hour) and Fixed OH ($1.90 per DL hour) is based on an expected volume of 12,000 units, which is 80% of the factorys capacity of 15,000 units per month. Per the firms flexible OH budget, the Budgeted OH costs per month at the 70%, 80%, and 90% capacity level are: Operating levels (% of capacity) 70% 80% 90% Units of production 10,500 12,000 13,500 Standard DL hours 23,100 26,400 29,700 Budgeted OH Costs: Variable OH $109,725 $125,400 $141,075 Fixed OH $50,160 $50,160 $50,160

The firm reported the following actual costs for the month of May when it operated at 90% of capacity, producing 13,500 units. Actual output 13,500 Units Direct materials purchased and used 70,200 ounces Actual cost of materials purchased $224,640 Actual direct labor hours used 28,350 DL hours Actual direct labor cost $311,850 Actual variable overhead cost $130,410 Actual fixed overhead cost $50,000

Answer the following (0.5pts each): a. Calculate the DM price variance. Indicate whether this variance is favorable (F) or unfavorable (U). b. Calculate the DM quantity variance. Indicate whether this variance is favorable (F) or unfavorable (U). c. Calculate the DM cost variance. Indicate whether this variance is favorable (F) or unfavorable (U). d. Calculate the DL rate variance. Indicate whether this variance is favorable (F) or unfavorable (U). e. Calculate the DL efficiency variance. Indicate whether this variance is favorable (F) or unfavorable (U). f. Calculate the DL cost variance. Indicate whether this variance is favorable (F) or unfavorable (U). g. Calculate the Variable OH Spending Variance. Indicate whether this variance is favorable (F) or unfavorable (U). h. Calculate the Variable OH Efficiency Variance. Indicate whether this variance is favorable (F) or unfavorable (U). i. Calculate the Variable OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U). j. Calculate the Fixed OH Volume Variance. Indicate whether this variance is favorable (F) or unfavorable (U). k. Calculate the Fixed OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U). l. Calculate the Total OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U).