a. Determine the price variance, quantity variance, and total direct materials cost variance. Use the minus sign to enter favorable variances as negative numbers. Price variance: $__488________________ Unfavorable 2,440 X ($8.30 - $8.10) = $488 Unfavorable Quantity variance: $_____-$486______________ Favorable (2,440 - 2,500) X $8.10 = -$486 Favorable Total direct materials cost variance: $____2____________ unfavorable $488 - $486 = $2 Also (2440 X $8.3) - (2500 X $8.1) = $2 b. Determine the rate variance, time variance, and total direct labor cost variance. Use the minus sign to enter favorable variances as negative numbers. Rate variance: $____675__________ Unfavorable 3750 X ($17.68 - $17.50) = $675 Time variance: $____-875__________ Favorable (3750 - 3,800) X $17.50 = -$875 Total direct labor cost variance: $_____-$200________ Favorable $675 - $875 = -$200 Favorable Also (3750 X $17.68) - (3800 X $17.50) = -$200 Favorable c. Determine variable factory overhead Controllable Variance, the fixed factory overhead volume variance, and total factory overhead cost variance. Use the minus sign to enter favorable variances as negative numbers. Variable factory overhead controllable variance: $________-260___________ Favorable $8,100 - (3,800 X $2.20) = -$260 Fixed factory overhead volume variance: $_______350_________ Unfavorable $13,650 - (3,800 X $3.50) = $350 Total factory overhead cost variance: $_______90__________ Unfavorable $350 - $260 = $90 Also ($13,650 + $8,100) - (3800 X ($3.50+ $2.20) = 90 Unfavorable

Alternative Computation of Overhead Variances:

Factory Overhead

Bitmap Bitmap

Actual costs

*

*

Applied costs

Bitmap Bitmap

Balance

*

*

Underapplied

Actual Factory

Budgeted Factory Overhead

Applied Factory

Overhead

for Amount Produced

Overhead

Variable cost

$8,360

*

Fixed cost

13,650

$90

*

Bitmap Bitmap Bitmap Bitmap

Total

Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap Bitmap

$22,010

($260)

F

$350

U

Controllable

Volume

Variance

Variance

$90

U

Total Factory Overhead Cost Variance