# The following standard costs were developed for one of the products of ABC Company:STANDARD COST CARD PER UNITDirect materials: 20 pounds x \$10 per pound .................................. \$200.00Direct labor: 2 hours x \$17 per hour .................................................... 34.00Variable overhead: 2 hours x \$10 per hour .......................................... 20.00Fixed overhead: 2 hours x \$8 per hour ................................................ 16.00Total standard cost per unit ............................................................. \$

## This problem has been solved!

The following standard costs were developed for one of the products of ABC Company:
STANDARD COST CARD PER UNIT
Direct materials: 20 pounds x \$10 per pound .................................. \$200.00
Direct labor: 2 hours x \$17 per hour .................................................... 34.00
Variable overhead: 2 hours x \$10 per hour .......................................... 20.00
Fixed overhead: 2 hours x \$8 per hour ................................................ 16.00
Total standard cost per unit ............................................................. \$ 270.00

The following information is available regarding the company's operations for the period:

Budgeted fixed overhead for the period is \$880,000, and the standard fixed overhead rate is based on an expected capacity of 110,000 direct labor hours.

Required:
a. Calculate the materials price variance and material usage variance; indicate whether it is favorable or unfavorable.
b. Calculate the labor rate variance and labor efficiency variance; indicate whether it is favorable or unfavorable.
c. Calculate the variable overhead spending variance and variable overhead efficiency variance; indicate whether it is favorable or unfavorable.
d. Calculate the fixed overhead spending variance and the fixed overhead volume variance; indicate whether it is favorable orunfavorable.