Standards Director material 3 b $1.5 /t Director labor Variable overhead 2 hours

Question

Standards Director material 3 b $1.5 /t Director labor Variable overhead 2 hours $3.0 b Fixed overhead $4.50 2 hours@ $2.0/hour $4.00 $6.00 $9.00 Total $23 50 Budgeted production-50 Actual results Director material Director labor Variable overhead Fixed overhead units produced $400 5360 $240 $5000 200 1bs 120 actual hours 120actual hours a. Calculate the direct materials price variance b. Calculate the direct materials quanthy variance c. Calculate the direct labor rate variance d. Calculate the direct labor efficiency variance e. Calculate the variable overhead rate variance

Explanation / Answer

1) Direct material price variance = (1.5*200-400) = 100 U

2) Direct material quantity variance = (55*3-200)*1.5 = 52.50 U

3) Direct labour rate variance = (2*120-360) = 120 U

4) Direct labour efficiency variance =(55*2-120)*2 = 20 U

5) Variable overhead rate variance = (3*120-240) = 120 F

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