Calculate the following variances and show all your work to receive full credit.

Question

Calculate the following variances and show all your work to receive full credit.       

a. Calculate the material price variance.                                

b. Calculate the material quantity variance.                                                                

c. Calculate the labor rate variance

d. Calculate the labor efficiency variance.   

f. Calculate the overhead volume variance.   

e. Calculate the controllable overhead variance.  

Budget based on attainable standards. Production          20,000 units Direct labor hours          12,000 hours Overhead formula $35,000 + $3.00 per unit Direct material 3.0 lbs $1.20 per lb $3.60 Direct labor 0.5 hrs $9.00 per hour $4.50 Overhead per unit $4.75 Total Standard cost per unit $12.85 Actual Production         18,000 units Material         52,000 lbs costing $67,600 purchased and used Direct labor           9,200 hrs $8.95 per hour Overhead        $87,000

Explanation / Answer

a= material price variance = 2800 favourable
b= material quantity varience 2000 adverse

c= labour rate variance 900 favourable

d= labour efficiency variance = 200 adverse

e= overhead variance = 8000

f= controlable variance = 6000

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