Cajun Candy Corporation manufactures giant gourmet suckers. The cost standards developed by Cajun appear below. Manufacturing overhead at Cajun is applied to production on the basis of standard direct labor-hours:
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Standard quantity per sucker
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Standard cost per ounce or hour
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Standard cost per sucker
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Direct materials.............................................
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0.75 ounces
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$20.00
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$15.00
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Direct labor....................................................
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1.2 hours
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$12.00
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14.40
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Variable overhead........................................
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1.2 hours
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$3.00
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3.60
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Fixed overhead.............................................
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1.2 hours
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$5.00
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6.00
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Total standard cost per sucker...................
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$39.00
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The standards above were based on an expected annual volume of 8,000 suckers. The actual results for last year were as follows:
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Number of suckers produced..................................................................
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8,200
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Direct labor-hours incurred......................................................................
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10,000
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Ounces of direct materials purchased....................................................
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7,900
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Ounces of direct materials used in production.....................................
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6,070
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Total cost of direct materials purchased...............................................
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$156,815
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Total direct labor cost...............................................................................
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$122,800
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Total variable overhead cost...................................................................
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$28,600
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Required:
Compute the following variances for Cajun.
a. Materials price variance.
b. Materials quantity variance.
c. Labor efficiency
d. Labor rate variance.
e. Labor spending variance
f. Variable overhead spending variance.
g. Variable overhead efficiency variance.