Waterfall, Inc. has provided the following standards data concerning one of their products. Assume that OH costs are applied to products based on direct labor (DL) hours.

Inputs	Standard quantity or standard hours of input per unit of output		Standard price or rate per unit of input
Direct materials	10.0	Ounces	$5.75	Per ounce
Direct labor	1.25	DL hours	$14.00	Per DL hour
Variable overhead	1.25	DL hours	$3.20	Per DL hour
Fixed overhead	1.25	DL hours	$2.80	Per DL hour

The standard OH rate for both Variable OH ($3.20 per DL hour) and Fixed OH ($2.80 per DL hour) is based on an expected volume of 9,000 units, which is 60% of the factory’s capacity of 15,000 units per month. Per the firm’s flexible OH budget, the Budgeted OH costs per month at the 60%, 70%, and 80% capacity level are:

Operating levels (% of capacity)
60%	70%	80%
Units of production	9,000	10,500	12,000
Standard DL hours	11,250	13,125	15,000
Budgeted OH Costs:
Variable OH	$36,000	$42,000	$48,000
Fixed OH	$31,500	$31,500	$31,500

The firm reported the following actual costs for the month of May when it operated at 70% of capacity, producing 10,500 units.

Actual output	10,500	Units
Direct materials purchased and used	102,380	ounces
Actual cost of materials purchased	$593,804
Actual direct labor hours used	14,700	DL hours
Actual direct labor cost	$207,270
Actual variable overhead cost	$44,100
Actual fixed overhead cost	$32,000

1. Calculate the DM price variance. Indicate whether this variance is favorable (F) or unfavorable (U).
2. Calculate the DM quantity variance. Indicate whether this variance is favorable (F) or unfavorable (U).
3. Calculate the DM cost variance. Indicate whether this variance is favorable (F) or unfavorable (U).
4. Calculate the DL rate variance. Indicate whether this variance is favorable (F) or unfavorable (U).
5. Calculate the DL efficiency variance. Indicate whether this variance is favorable (F) or unfavorable (U).
6. Calculate the DL cost variance. Indicate whether this variance is favorable (F) or unfavorable (U).
7. Calculate the Variable OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U).
8. Calculate the Fixed OH Volume Variance. Indicate whether this variance is favorable (F) or unfavorable (U).
9. Calculate the Fixed OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U).
10. Calculate the Total OH Cost Variance. Indicate whether this variance is favorable (F) or unfavorable (U).

Answer rating: 100% (QA)

a Direct Labor Efficiency variance Direct labor efficiency variance focuses on the number of products on a given timeIt is the difference between Actual labor hours used for production and the standar... View the full answer