I don't know how to solve this accounting problem. The problem is about Variance Analyses.

Problem:

Materials, Labor and Factory Overhead.(CPA, adapted) The Palmtown Furniture Company uses a standard cost system in accounting for its production costs.

The standard cost of a unit of furniture follows:

Lumber, 100 feet @$150 per 1,000 feet $15.00

Direct labor, 4 hours @ 2.50 per hour 10.00

Factory overhead:

Fixed (30% of direct labor) $3.00

Variable (60% of direct labor) 6.00 9.00

Total unit cost $34.00

The following flexible monthly overhead budget is in effect:

Direct Labor Hours Budgeted Overhead

5,200. $10,800

4,800. 10,200

4,400. 9,600

4,000(normal capacity) 9,000

3,600.. 8,400

The actual data for the month of December follows:

1,200 finished units

Lumber purchased 150,000 feet @ $120 per 1,000 feet

Lumber used 110 feet per unit

Direct labor 4 1/4 hours per unit @ $2.60 per hour

Fixed Factory overhead $2,655

Variable Factory overhead $7,905

Required: An analysis of each element of the total variance from standard cost for the month of December.