*Waterways Continuing Problem 12

At the end of June the manager of the B.C. manufacturing plant was provided with the following variance analysis report:

		Budget		Actual		Variance		Favourable (F)/ Unfavourable (U)
Production in units		338,000		350,000		12,000		F
Production costs:
Direct material		$892,320		$896,952		$(4,632)		U
Direct labour		1,183,000		1,193,700		(10,700)		U
Variable overhead costs		202,800		208,907		(6,107)		U
Fixed overhead costs		202,800		196,445		6,355		F
Total production costs		$2,480,920		$2,496,004		$(15,084)		U

The manager immediately called the production supervisor, demanding an explanation for the large unfavourable variance for the quarter. The production supervisor was puzzled. He thought the cost-cutting measures they had incorporated were beginning to work. He certainly wasnt expecting such a large discrepancy. The standard rates the plant was using with its normal costing system are summarized below.

		Volume			Cost
Direct material		1.10	kg per unit		$2.40	per kg
Direct labour		0.25	hour per unit		$14.00	per hour
Predetermined overhead rate:
Variable		0.25	hour per unit		$2.40	per hour
Fixed		0.25	hour per unit		$2.40	per hour

Other relevant information:

1.		A total of 393,000 kg of direct materials were purchased during the quarter at a cost of $2.45 per kilogram.
2.		A total of 373,730 kg of direct materials were used in production to manufacture 350,000 units.
3.		Payroll recorded 86,500 direct labour hours at an average cost of $13.80 per hour.

Calculate the following production variances.

Material price variance		$
Material quantity variance		$
Labour price variance		$
Labour efficiency variance		$
Variable overhead variance		$