Problem - Direct Materials Price and Usage Variances
The Woods Enterprises prepared the following standard costs for the production of one stuffed bear:
Direct materials 1.5 pounds of stuffing @ $2 per lb
Direct labor 2 hours of assembly @ $15 per hr
Actual production costs for the production of 1,000 stuffed bears required 1,750 pounds of stuffing at a cost of $1.95 per pound and 1,950 labor hours at $15.25 per hour.
A) Calculate the direct material price variance.
B) Calculate the direct material usage variance.
Problem - Variable Overhead Spending and Efficiency Variances
Bittermen Company, which uses standard costing, reported the following overhead information for the last quarter of the year:
Actual overhead incurred:
Fixed $10,500
Variable 66,810
Budgeted fixed overhead 11,000
Variable overhead rate per direct labor hour 5.00
Standard hours allowed for actual production 13,100
Actual labor hours used 13,000
A) What is the variable overhead spending variance?
B) What is the variable overhead efficiency variance?