Problem 8-13A: Basic Variance Analysis (LO2, LO3,LO4) Riley Labs produces variou
ID: 2446609 • Letter: P
Question
Problem 8-13A: Basic Variance Analysis (LO2, LO3,LO4)
Riley Labs produces various chemicalcompounds for industrial use. One compound, called Lundor, isprepared using an elaborate distilling process. The company hasdeveloped standard costs for one unit of Lundor as follows:
Standard
Quantity
Standard Price or
Rate
Standard
Cost
Direct materials
2.0
ounces
$
22.00
per ounce
$
44.00
Direct labor
1.3
hours
$
12.00
per hour
15.60
Variable manufacturing overhead
1.3
hours
$
3.00
per hour
3.90
$
63.50
During November,the following activity was recorded by the company relative toproduction of Lundor:
Compute thevariable overhead spending and efficiency variances.
Variable overhead spending variance
$
Variable overhead efficiency variance
$
Problem 8-13A: Basic Variance Analysis (LO2, LO3,LO4)
Explanation / Answer
x.