Question: Marilyn, Inc., uses a standard cost system and analyzes overhead using a two-variance analysis. The following information relates to its operations in April: Actual total
Marilyn, Inc., uses a standard cost system and analyzes overhead using a two-variance analysis. The following information relates to its operations in April:
Actual total cost for direct labor ................ $86,800
Total direct labor hours worked .................. 14,000
Total standard labor hours for the output in April ........... 15,000
Direct labor rate variance—unfavorable ............. $2,800
Actual total overhead cost................... $32,000
Budgeted fixed overhead cost .................. $9,000
Practical capacity, in hours .................. 12,000
Total overhead application rate per standard direct labor hour ..... $2.25
Required
1. What was Marilyn’s direct labor efficiency variance for April?
2. What was Marilyn’s factory overhead flexible-budget variance for April?
3. What was Marilyn’s production-volume variance for April?
4. What is the relationship between the direct labor efficiency variance and the variable overhead efficiency variance?
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1 Breakdown of total direct labor variance for April Standard DL hourly wage rate SP FB Based on Inputs hours worked 86800 2800 84000 Actual direct la... View full answer
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