Computing materials, labor, and cost variances The following dat

Computing materials, labor, and cost variances The following data were drawn from the records of Inman Corporation.

Planned volume for year (static budget)...... 4,000 units

Standard direct materials cost per unit...... 3.1 lbs. @ $1.50 per pound

Standard direct labor cost per unit.......2 hours @ $4.00 per hour

Total expected fixed overhead costs...... $18,800

Actual volume for the year (flexible budget)..... 4,200 units

Actual direct materials cost per unit....... 2.7 lbs. @ $2.00 per pound

Actual direct labor cost per unit.......... 2.3 hrs. @ $3.60 per hour

Total actual fixed overhead costs....... $15,000

Required

a. Prepare a materials variance information table showing the standard price, the actual price, the standard quantity, and the actual quantity.

b. Calculate the materials price and usage variances. Indicate whether the variances are favorable (F) or unfavorable (U).

c. Prepare a labor variance information table showing the standard price, the actual price, the standard hours, and the actual hours.

d. Calculate the labor price and usage variances. Indicate whether the variances are favorable (F) or unfavorable (U).

e. Calculate the predetermined overhead rate, assuming that Inman uses the number of units as the allocation base.

f. Calculate the fixed cost spending variance. Indicate whether the variance is favorable (F) or unfavorable (U).

g. Calculate the fixed cost volume variance. Indicate whether the variance is favorable (F) or unfavorable (U).