Frosty Menu Company produces cases of frozen food. During April, the company produced 1450 cases of food and incurred the following actual costs:

Variable overhead ....................................................... $11 000

Fixed overhead ............................................................ 26 000

Actual direct labour cost (8000 direct labour hours) ............... 151 200

Actual material cost (30 000) kilograms purchased and used) .... 66 000

Standard cost and annual budget information is as follows:

________________________________ Standard cost per case

Direct labour (5 hours @ $18) ..................... $90.00

Direct material (20 kilograms @ $2) ................ 40.00

Variable overhead (5 hours @ $1.50) ................ 7.50

Fixed overhead (5 hours @ $3) ..................... 15.00

Total ................................................. $152.50

________________________________ Annual budget information

Variable overhead .............................................. $150 000

Fixed overhead ................................................ $300 000

Planned activity for year ............... 100 000 direct labour hours

Required:

1. Prepare as complete an analysis of cost variance as is possible from the available data.

2. Construct an Excel® spreadsheet to answer requirement 1, above, Show how the solution will change if the following information changes:

(a) Standard direct labour rate was $19 per hour.

(b) Standard variable overhead rate $1.80 per direct labour hour?