Fortes Inc. has provided the following data concerning one of the products in it

Question

Fortes Inc. has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours

Inputs

The company has reported the following actual results for the product for April

Required:

a. Compute the materials price variance for April.

b. Compute the materials quantity variance for April.

c. Compute the labor rate variance for April.

d. Compute the labor efficiency variance for April.

e. Compute the variable overhead rate variance for April.

f. Compute the variable overhead efficiency variance for April.

(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Inputs

Standard Quantity or hours per unit of output Standard Price/rate Direct materials 8.0 ouncs $8.1 per ounce Direct Labor .5 hours $24.7 per hour Variable manufacturing overhead .5 hours $6.4 per hour

Explanation / Answer

a Materials price variance=386210-(62350*8.1)= 118825 F b Materials quantity variance=8.1*(52020-6500*8)= 162 U c Labor rate variance=88880-(3450*24.7)= 3665 U d Labor efficiency variance=24.7*(3450-6500*0.5)= 4940 U e Variable overhead rate variance=21295-(3450*6.4)= 785 F f Variable overhead efficiency variance=6.4*(3450-6500*0.5)= 1280 U

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