Problem - The standards for one case of Peardrax are:
Direct Material -based on 3,000 cases 8 lb @ $3.40 lb
Direct Labor -based on 3,000 cases 4 hrs@ $15.35/hr
Variable Overhead -based on 3,000 cases 2 hrs @ $5.25/hr
During the week ended June 7 the following activity took place:
- 5,240 machine hours were worked;
- 24,550 lbs. of raw material (direct material) were purchased for inventory at a total cost of $85,925;
- 3,030 cases of finished product were produced;
- 23,140 lbs. of raw material were used;
- 13,060 labor hours were worked at an average rate of $14.85 per hour;
- $28,475 actual variable overhead costs were incurred.
Calculate each of the following:
A) Flexible Budget
B) Price variance for raw materials purchased
C) Raw materials usage variance
D) Direct labor rate variance
E) Direct labor efficiency variance
F) Variable overhead spending variance
G) Variable overhead efficiency variance