MATERIALS, LABOR, AND OVERHEAD VARIANCES Bertgon Manufacturing has the following standard cost sheet for one of its products:
|
Direct materials (6 ft. @ $5) |
$30 |
|
Direct labor (1.5 hrs. @ $10) |
15 |
|
Fixed overhead (1.5 hrs. @ $2*) |
3 |
|
Variable overhead (1.5 hrs. @ $4*) |
6 |
|
Standard unit cost |
$54 |
During the most recent year, the following actual results were recorded:
|
Production |
12,000 units |
|
Fixed overhead |
$33,000 |
|
Variable overhead |
$69,000 |
|
Direct materials (71,750 ft. purchased) |
$361,620 |
|
Direct labor (17,900 hrs.) |
$182,580 |
Required:
Compute the following variances:
1. Direct materials price and usage variances.
2. Direct labor rate and efficiency variances.
3. Variable overhead spending and efficiency variances.
4. Fixed overhead spending and volume variances.