Question:
MATERIALS, LABOR, AND OVERHEAD VARIANCES Bertgon Manufacturing has the following standard cost sheet for one of its products:
|
Direct materials (6 ft. @ $5)
|
$30
|
|
Direct labor (1.5 hrs. @ $10)
|
15
|
|
Fixed overhead (1.5 hrs. @ $2*)
|
3
|
|
Variable overhead (1.5 hrs. @ $4*)
|
6
|
|
Standard unit cost
|
$54
|
During the most recent year, the following actual results were recorded:
|
Production
|
12,000 units
|
|
Fixed overhead
|
$33,000
|
|
Variable overhead
|
$69,000
|
|
Direct materials (71,750 ft. purchased)
|
$361,620
|
|
Direct labor (17,900 hrs.)
|
$182,580
|
Required:
Compute the following variances:
1. Direct materials price and usage variances.
2. Direct labor rate and efficiency variances.
3. Variable overhead spending and efficiency variances.
4. Fixed overhead spending and volume variances.