PROBLEM # 1
Silmon Corporation makes a product with the following standard costs:
In June the company produced 4,200 units using 21,830 grams of the direct material and 2,580 direct labor-hours.
During the month the company purchased 24,100 grams of the direct material at a price of $6.80 per gram. The actual
direct labor rate was $14.60 per hour and the actual variable overhead rate was $3.90 per hour. The materials price
variance is computed when materials are purchased. Variable overhead is applied on the basis of direct labor-hours.
a. Compute the materials quantity variance.
b. Compute the materials price variance.
c. Compute the labor efficiency variance.
d. Compute the direct labor rate variance.
e. Compute the variable overhead efficiency variance.
f. Compute the variable overhead rate variance.
PROBLEM # 2
Walkenhorst Corporation’s manufacturing overhead includes $7.80 per machine-hour for supplies; $7.30 per machinehour
for indirect labor; $21,210 per period for salaries; and $19,950 per period for depreciation.
Required: Determine the predetermined overhead rate if the denominator level of activity is 1,500 machine-hours.