Week 6 Assignment Ch 6 Paul Benny picked up the monthly report that Eve Lynch left on his desk. He was pleased to see the favorable variance for operating income. He had pushed hard to exceed budgeted monthly production by 325 units. But, Paul was puzzled by some of line iterns in the report. He wonders whether it's an error that most of the operating expenses are higher than the budget after all his hard work to manage the production line to improve efficiency and reduce costs. The report Paul reviewed is shown below: Actual Budget Variance 13,325 13,000 325 F $2,531,750 729,300 2,431,000 715,000 $100,750 F 14,300 U 347,945 338,000 9,945 U 370,516 364,000 6,516 U Units produced and sold Sales revenue Direct material Direct labor Variable manufacturing overhead Variable selling expenses Variable administrative expenses Contribution margin Fixed manufacturing overhead Fixed selling expenses Fixed administrative expenses 121,069 117,000 4,069 54,262 52,000 2,2620 908,658 845,000 63,658 F 144,300 143,000 1,300 U 90,350 91,000 650 F 168,740 169,000 260 F Operating income $505,268 $442,000 $63,268 F Paul called Eve into his office to discuss all the unfavorable variances in the operating costs. Paulis very confused about how the budgeted operating income for the month is favorable, and yet there are so many unfavorable variances on the operating costs. Eve has promised Paul to investigate and report back any findings. Eve has also gathered the following additional information about the month's performance . . Direct materials purchased: 132,600 pounds at a total of $729,300 Direct materials used: 132.600 pounds Direct labor hours worked! 34,450 at a total cost of $347.945 Machine hours used: 53,235 Standard Cost 9.55.00 Eve also found the standard cost card for a unit of product. Standard Price Standard Quantity Direct materials $5.50 per pound 10 pounds Direct labor $10.00 per DLH 2.6 DUH Variable overhead $7.00 per MH 4 MH Fixed overhead $3.58 per MH 4 MH Total standard cost per unit 26.00 28.00 1432 $122.32 Required a Calculate the direct material price variance for the month. b. Calculate the direct material quantity variance for the month. Calculate the direct labor rate variance for the month. d. Calculate the direct labor efficiency variance for the month. e. Calculate the variable overhead spending variance for the month. 1. Calculate the variable overhead efficiency variance for the month