Problem: Lido Company's standard and actual costs per unit for the most recent period, during which 400 units were actually produced, are given below:
|
Materials:
|
Standard
|
Actual
|
|
|
|
|
Standard: 2 metres at $1.50 per m.
|
$ 3.00
|
|
|
Actual: 2.1 metres. at $1.60 per m.
|
|
$ 3.36
|
|
Direct labour:
|
|
|
|
Standard: 1.5 hrs. at $6.00 per hr.
|
9.00
|
|
|
Actual: 1.4 hrs. at $6.50 per hr.
|
|
9.10
|
|
Variable overhead:
|
|
|
|
Standard: 1.5 hrs. at $3.40 per hr.
|
5.10
|
|
|
Actual: 1.4 hrs. at $3.10 per hr.
|
|
4 34
|
|
Total unit cost
|
$17.10
|
$16.80
|
From the above information, compute the following variances. Show whether the variance is favourable (F) or unfavourable (U):
a) Materials price variance
b) Materials quantity variance
c) Direct labour rate variance
d) Direct labour efficiency variance
e) Variable overhead spending variance
f) Variable overhead efficiency variance