Answer:
Instructions are below.
Explanation:
Giving the following information:
Direct materials 7.60 liters $ 7.20 per liter
Direct labor 0.60 hours 23.70 per hour
Variable manufacturing overhead 0.60 hours $ 6.10 per hour
Actual output 9,800 units
Raw materials purchased 75,200 liters
Actual cost of raw materials purchased $ 564,500
Raw materials used in production 74,500 liters
Actual direct labor-hours 5,500 hours
Actual direct labor cost $ 135,302
Actual variable overhead cost $ 29,314
1) To calculate the direct material price and quantity variance, we need to use the following formulas:
Direct material price variance= (standard price - actual price)*actual quantity
Actual pirce= 564,500/75,200= 7.51
Direct material price variance= (7.2 - 7.51)*75,200
Direct material price variance= $23,312 unfavorable
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (7.6*9,800 - 74,500)*7.2
Direct material quantity variance= $144 favorable
2) To calculate the direct labor rate and efficiency variance, we need to use the following formulas:
Direct labor time (efficiency) variance= (Standard Quantity - Actual Quantity)*standard rate
Standard quantity= 0.6*9,800= 5,880
Direct labor time (efficiency) variance= (5,880 - 5,500)*23.7
Direct labor time (efficiency) variance= $9,006 favorable
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Actual rate= 135,302/5,500= 24.6
Direct labor rate variance= (23.7 - 24.6)*5,500
Direct labor rate variance= $4,950 unfavorable
3) To calculate the variable overhead rate and efficiency variance, we need to use the following formulas:
Manufacturing overhead rate variance= (standard rate - actual rate)* actual quantity
Actual rate= 29,314/5,500= 5.33
Manufacturing overhead rate variance= (6.10 - 5.33)*5,500
Manufacturing overhead rate variance= $4,235 favorable
variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate
variable overhead efficiency variance= (0.6*9,800 - 5,500)*6.1
variable overhead efficiency variance= $2,318 favorable
