The standards for one case of liquid weed killer are as follows:

During the week ended May 6, the following activity took place: 4,360 machine hours were worked. 22,800 lb of raw material were purchased for inventory at a total cost of $174,420. 3,800 cases of finished product were produced. 22,580 lbs of raw material were used. 13,440 labor hours were worked at an average rate of $16.25 per hour. $23,108 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 efficiency variance.

Transcribed Image Text:

Direct materials . . . . Direct labor 6 lb @ $ 7.50/lb 3.6 hr @ $16.00/hr Variable overhead (based on 1.2 hr @ $ machine hours) 5.50/hr