Exercise $16-40($Algo$)$ Variable Cost Variances $($LO $16-5)$

Golden Food Products produces special$-$formula pet food. The company carries no inventories. The master budget calls for the company to manufacture and sell $120,500$ cases at a budgeted price of $$60$ per case this year. The standard direct cost sheet for one case of pet food follows:

Direct materials$(3$ pounds @ $$2)$$ $6$Direct labor$(0\mathrm{.}25$ hours @ $$32)8$

Variable overhead is applied based on direct labor$-$hours. The variable overhead rate is $$16$ per direct labor$-$hour. The fixed overhead rate $($at the master budget level of activity$)$ is $$10$ per unit. All nonmanufacturing costs are fixed and are budgeted at $$2\mathrm{.}2$ million for the coming year.

At the end of the year, the costs analyst reported that the sales activity variance for the year was $$336,000$ favorable.

The following is the actual income statement $($in thousands of dollars$)$ for the year for Golden Food Products:

Sales revenue$ $8,300$Less variable costs$$Direct materials$802$Direct labor$994$Variable overhead$517$Total variable costs$ $2,313$Contribution margin$ $5,987$Less fixed costs$$Fixed manufacturing overhead$1,305$Nonmanufacturing costs$2,126$Total fixed costs$ $3,431$Operating profit$ $2,556$

During the year, the company purchased $320,500$ pounds of material and employed $32,640$ hours of direct labor.

Required:

Compute the direct materials price and efficiency variances.

Compute the direct labor price and efficiency variances.

Compute the variable overhead price and efficiency variances.