Materials, Labor, and Overhead Variances
Wangsgard Manufacturing has the following standard cost sheet for one of its products:
|
Direct materials (2 ft. @ $5)
|
$10
|
|
Direct labor (0.5 hr. @ $10)
|
5
|
|
Fixed overhead (0.5 hr. @ $2)*
|
1
|
|
Variable overhead (0.5 hr. @ $4)
|
2
|
|
Standard unit cost
|
$18
|
*Rate based on expected activity of 2,500 hours.
During the most recent year, the following actual results were recorded:
|
Production
Direct materials (11,750 ft. purchased and used)
|
6,000 units
$ 61,100
|
|
Direct labor (2,900 hrs.)
|
29,580
|
|
Fixed overhead
|
6,000
|
|
Variable overhead
|
10,500
|
Required
Compute the following variances:
1. Materials price and usage variances.
2. Labor rate and efficiency variances.
3. Variable overhead spending and efficiency variances.
4. Fixed overhead spending and volume variances.