Problem - The Liski Company has established standards as follows:
Direct material ................................ 3 pounds @ $4/pound = $12 per unit
Direct labor .................................... 2 hours @ $8/hour = $16 per unit
4 Variable overhead ............................. 2 hours @ $5/hour = $10 per unit
Actual production figures for the past year were as follows:
Units produced ................................... 500
Direct material used ............................. 1,600 pounds
Direct material purchased (3,000 pounds)... $12,300
Direct labor cost (950 hours) .................. $7,790
Variable overhead cost incurred ............... $4,655
1. The materials price variance is:
a. $160 U
b. $6,300 U
c. $300 U
d. $150 U
2. The materials quantity variance is:
a. $ 400 U
b. $410 F
c. $410 U
d. $ 6,000 U
3. The labor rate variance is:
a. $210 F
b. $190 F
c. $399 F
d. $190 U
4. The labor efficiency variance is:
a. $400 F
b. $800 F
c. $800 U
d. $500 F
5. The variable overhead spending variance is:
a. $345 F
b. $95 F
c. $655.50 F
d. $345 U
6. The variable overhead efficiency variance is:
a. $500 F
b. $500 U
c. $245 F
d. $250 F