Problem - Calculating Direct Materials, Direct Labor, Variable Manufacturing Overhead Variances
Bullseye Company manufactures dartboards. Its standard cost information follows:
Standard Quantity Standard Price (Rate) Standard Unit Cost
Direct materials (cork board) 2.5 sq. ft. $ 2.00 per sq. ft. $ 5.00
Direct labor 1 hr. $ 14.00 per hr. 14.00
Variable manufacturing overhead (based on direct labor hours) 1 hr. $ 0.50 per hr. 0.50
Fixed manufacturing overhead ($40,000 ÷ 160,000 units) 0.25
Bullseye has the following actual results for the month of September:
Number of units produced and sold 140,000
Number of square feet of corkboard used 360,000
Cost of corkboard used $ 756,000
Number of labor hours worked 148,000
Direct labor cost $ 1,938,800
Variable overhead cost $ 72,000
Fixed overhead cost $ 50,000
Required:
1. Calculate the direct materials price, quantity, and total spending variances for Bullseye.
2. Calculate the direct labor rate, efficiency, and total spending variances for Bullseye.
3. Calculate the variable overhead rate, efficiency, and total spending variances for Bullseye.