The following standard costs were developed for one of the products of CH Industries:

STANDARD COST CARD PER UNIT

Direct materials: 4 feet x $14 per foot ..............$ 56.00

Direct labor: 8 hours x $10 per hour ................... 80.00

Variable overhead: 8 hours x $8 per hour .......... 64.00

Fixed overhead: 8 hours x $12 per hour ........... 96.00

Total standard cost per unit ..............................$296.00

The following information is available regarding the company's operations for the period:

Budgeted fixed overhead for the period is $960,000, and the standard fixed overhead rate is based on an expected capacity of 80,000 direct labor hours.

Required:
a. Calculate the materials price variance and material usage variance; indicate whether it is favorable or unfavorable.
b. Calculate the labor rate variance and labor efficiency variance; indicate whether it is favorable or unfavorable.
c. Calculate the variable overhead spending variance and variable overhead efficiency variance; indicate whether it is favorable or unfavorable.
d. Calculate the fixed overhead spending variance and the fixed overhead volume variance; indicate whether it is favorable orunfavorable.

Transcribed Image Text:

Units produced Materials purchased Materials used Direct labor Overhead incurred 11,000 52,000 40,000 84,000 feet at S13.70 per foot feet hours costing $840,000 Variable S756,000 Fixed S1,000,000