Hite Company has developed standard costs given below for product for 2009:
HITE COMPANY
Standard Cost Card |
| Product A |
|
|
|
| Cost Element |
Standard Quality |
x Standard Price |
= Standard |
| Direct materials |
4 pounds |
$3 |
$12 |
| Direct labor |
3 hours |
8 |
24 |
| Manufacturing overhead |
3 hours |
4 |
12 |
|
|
|
$48 |
Company anticipated to make 25,000 units of Product A in 2009 and work 75,000 direct labor hours.
Actual results for 2009 are given below:
- 26,000 units of Product A were made.
- Actual direct labor costs were $630,800 for 76,000 direct labor hours worked.
- Actual direct materials bought and used during year cost $283,500 for 105,000 pounds.
- Actual variable overhead incurred was $130,000 and actual fixed overhead incurred was $170,000.
Determine given variances illustrating all computations to support the answers. Clearly indicate whether variances are favorable or unfavorable. Illustrate work.
i) Materials quantity variance.
ii) Total direct labor variance.
iii) Direct labor quantity variance.
iv) Direct materials price variance.
v) Total overhead variance.