Refer to the data in Exercise 11–2. Assume that instead of producing 2,000 units during the month, the company produced only 1,500 units, using 6,500 kilograms of material in the production process. (The rest of the material purchased remained in inventory.)

Required:

1. Compute the direct materials price and quantity variances for the month.

2. Will the overhead volume variance be different now from its value in Exercise 11–2?

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Standard Quantity or Standard Price or Rate Standard Cost Hours $2 per kilogram $8.20 Direct materials 4.2 kilograms Direct labour 0.4 hour $12 per hour 4.80 Variable overhead 0.4 hour $2 per hour 0.80