(Comprehensive) Piedmont Manufacturing produces metal products with the following standard quantity and cost information:
|
Direct Material |
||
|
Aluminum |
4 sheets at $4 |
$ 16 |
|
Copper |
3 sheets at $8 |
24 |
|
Direct labor |
7 hours at $16 |
112 |
|
Variable overhead |
5 machine hours at $6 |
30 |
|
Fixed overhead |
5 machine hours at $4 |
20 |
Overhead rates were based on normal monthly capacity of 6,000 machine hours.
During November, the company produced only 850 units because of a labor strike, which occurred during union contract negotiations. After the dispute was settled, the company scheduled overtime to try to meet regular production levels. The following costs were incurred in November:
|
Material |
|
|
Aluminum |
4,000 sheets purchased at $3.80; used 3,500 sheets |
|
Copper |
3,000 sheets purchased at $8.40; used 2,600 sheets |
|
Direct Labor |
|
|
Regular time |
5,200 hours at $16 (pre contract settlement) |
|
Regular time |
900 hours at $17 (post contract settlement) |
Variable Overhead
$23,300 (based on 4,175 machine hours)
Fixed Overhead
$18,850 (based on 4,175 machine hours)
Determine the following:
a. Total material price variance
b. Total material usage (quantity) variance
c. Labor rate variance
d. Labor efficiency variance
e. Variable overhead spending variance
f. Variable overhead efficiency variance
g. Fixed overhead spending variance
h. Volume variance
i. Budget variance
|
Direct Material |
||
|
Aluminum |
4 sheets at $4 |
$ 16 |
|
Copper |
3 sheets at $8 |
24 |
|
Direct labor |
7 hours at $16 |
112 |
|
Variable overhead |
5 machine hours at $6 |
30 |
|
Fixed overhead |
5 machine hours at $4 |
20 |
Overhead rates were based on normal monthly capacity of 6,000 machine hours.
During November, the company produced only 850 units because of a labor strike, which occurred during union contract negotiations. After the dispute was settled, the company scheduled overtime to try to meet regular production levels. The following costs were incurred in November:
|
Material |
|
|
Aluminum |
4,000 sheets purchased at $3.80; used 3,500 sheets |
|
Copper |
3,000 sheets purchased at $8.40; used 2,600 sheets |
|
Direct Labor |
|
|
Regular time |
5,200 hours at $16 (pre contract settlement) |
|
Regular time |
900 hours at $17 (post contract settlement) |
Variable Overhead
$23,300 (based on 4,175 machine hours)
Fixed Overhead
$18,850 (based on 4,175 machine hours)
Determine the following:
a. Total material price variance
b. Total material usage (quantity) variance
c. Labor rate variance
d. Labor efficiency variance
e. Variable overhead spending variance
f. Variable overhead efficiency variance
g. Fixed overhead spending variance
h. Volume variance
i. Budget variance