Riley Labs produces various chemicalcompounds for industrial use. One compound, called Lundor, isprepared using an elaborate distilling process. The company hasdeveloped standard costs for one unit of Lundor as follows:
|
Standard
Quantity
|
Standard Price or
Rate
|
Standard
Cost
|
|
Direct materials
|
2.0
|
ounces
|
$
|
22.00
|
per ounce
|
$
|
44.00
|
|
Direct labor
|
1.3
|
hours
|
$
|
12.00
|
per hour
|
|
15.60
|
|
Variable manufacturing overhead
|
1.3
|
hours
|
$
|
3.00
|
per hour
|
|
3.90
|
|
|
|
|
|
|
$
|
63.50
|
During November,the following activity was recorded by the company relative toproduction of Lundor:
a. Materials purchased, 19,000 ouncesat a cost of $358,150.
b. There was no beginning inventoryof materials; however, at the end of the month, 15,700 ounces ofmaterial remained in ending inventory.
c. The company employs 11 labtechnicians to work on the production of Lundor. During November,each worked an average of 174 hours at an average rate of $10.30per hour.
d. Variable manufacturing overhead isassigned to Lundor on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $4,976.
e. During November, 1,520 good unitsof Lundor were produced.
Compute the variable overhead spending and efficiency variances.
Variable overhead spending variance $
Variable overhead efficiency variance $