I am assigned a homework problem to do, but I am completely lost…I could really use some help please! On the whole thing..
Here it is:
Bronfenbrenner Co. uses a standard cost system for its single product in which variable overhead is applied on the basis of direct labor hours. The following information is given:
Standard costs per unit:
Raw materials (1.5 grams at $16.00 per gram)…………………….. $24.00
Direct labor (0.75 hours at $8 per hour)…………………………………. $6.00
Variable overhead (0.75 hours at $3 per hour)………………………. $2.25
Actual experience for current year:
Units produced………………………………………………………………………. 22,400 units
Purchases of raw materials (21,000 grams at $17 per gram). $357,000
Raw materials used………………………………………………………………. 33,400 grams
Direct labor (16,750 hours at $8 per hour)…………………………….. $134,000
Variable overhead cost incurred…………………………………………….. $48,575
Compute the following variances:
a. Direct materials price variance
b. Direct materials quantity variance
c. Direct labor rate variance
d. Direct labor efficiency variance
e. Variable overhead spending variance
f. Variable overhead efficiency variance