The standards for one case of Spring fever Tonic are as follows:

During the week ended August 28 the following activity took place:
7400 lb of raw materials were purchased for inventory at a cost of $4.95 per pound.
2000 cases of finished product were produced.
8300 lb of raw materials were used.
5800 direct labor hours w ere worked at a total cost of $78300
$35670 of actual variable overhead costs was 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 efficiency variance.

Transcribed Image Text:

Direct materials Direct labor Varable ovehead (based 4 b$5.00b $20 3 hr $13.00hr $39 on drect labor hours) 3 hr@ S6.00/hr $18