Zee Corporation has developed the following cost standards for the production of its leather backpacks:

Variable overhead at Zee is applied on the basis of direct labor hours. The actual results for last month were as follows:

The direct materials purchases variance is computed when the materials are purchased. Required: Compute the following variances for Zee.

a. Materials price variance.

b. Materials quantity variance.

c. Labor efficiency variance.

d. Variable overhead rate variance.

Standard Cost Per Backpack $45.00 $27.00 S36.00 Leather (1.5 yardsx $30 per yard) Direct labor (1.8 hours $15.00 per hour) Variable overhead (1.8 hours x $20.00 per hour) 10,000 17,300 16,440 15,930 $470,184 $241,335 3,920 ber of backpacks produced Direct labor hours incurred Yards of leather purchased Yards of leather used in production Cost of leather purchased Direct labor cost Variable overhead cost Materials price variance Materials quantity variance Labor efficiency variance Variable overhead rate variance