Question

Calculate variable cost variances—explain results. The standards for one case of liquid weed killer are:


During the week ended May 6, the following activity took place:
2,910 machine hours were worked.
11,400 lb of raw material were purchased for inventory at a total cost of $80,940.
1,900 cases of finished product were produced.
9,260 lb of raw material were used.
4,420 labor hours were worked at an average rate of $14.35 per hour.
$12,513 actual variable overhead costs were incurred.

Required:
Calculate each of the following variances and provide plausible explanations for the results:
a. Price variance for raw materials purchased.
b. Raw materials usage variance.
c. Direct labor rate variance.
d. Direct labor efficiency variance.
e. Variable overhead spending variance.
f. Variable overhead efficiencyvariance.


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  • CreatedOctober 07, 2013
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