Solve the following:
The standards for one carton of Wonder Wax are:
Direct materials 4 lbs. @ $2.55
Direct labor 6 hrs. @ $5.25
Variable overhead (based on direct labor hours) 6 hrs. @ $3.40
During the week ended December 4, the following activity took place:
• 4,600 lbs. of raw material were purchased for inventory at a cost of $2.63 per pound;
• 1,050 cartons of finished product were produced;
• 4,225 lbs. of raw material were used;
• 6,140 labor hours were worked at a total cost of $33,463;
• $20,569 actual variable overhead costs were incurred.
Calculate each of the following variances:
a. Price variance for raw materials purchased.
b. Raw materials usage variance.
c. Direct labor rate variance.
d. Direct labor efficiency variance.
e. Variable overhead spending variance.
f. Variable overhead efficiency variance.
G. Explain the factors that most likely caused the variances computed above: