Snuggs Corporation makes a product with the following standard costs:
Inputs………………….Standard Quanitity….. Standard Price
Rate Direct Materials….. 2.8 ounces…… $6.00 per ounce
Direct Labor…………0.3 hours………..$24.00 per hour
Variable Overhead 0.3 hours……….$4.00 per hour
The company reported the following results concerning this product in October.
Actual outputAc€¦Ac€¦1,100 units.
Raw materials used in productionAc€¦..2,790 ounces
Actual direct labor hoursAc€¦..350 hours
purchases of raw materialsAc€¦. 3,100 ounces
actual price of raw materails purchasedAc€¦..$6.20 per ounce
actual direct labor rateAc€¦. $25.50 per hour
actual variable overhead rateAc€¦Ac€¦$4.10 per hour
The company applies variable overhead on the basis of direct labor hours. The direct materials purchases variance is computed when the materials are purchased.
1. The variable overhead rate variance for October is:
A. $33 F
B. $35 U
C. $35 F
D. $33 U
2. The materials price variance for October is:
A. $620 F
B. $616 F
C. $616 U
D. $620 U