M120 Managerial Accounting Test 4
Ergonomics Inc. produces office chairs for users with particular physical needs. The company
uses standard costing and the following are the standard costs:
Direct Materials: 10 pounds per chair, $5 per pound
Direct Labor: 5 direct labor hours, $8 per DLH
Variable Overhead: 5 direct labor hours, $7 per DLH
Fixed Overhead: 5 direct labor hours, $12 per DLH
Actual Costs this year were:
Direct Materials: 133,400 pounds, $700,350
Direct Labor: 79,750 DLH, $622,050
Variable Overhead: $533,600
Fixed Overhead: $915,000
Complete the following and state whether the variance is F (favorable) or U (unfavorable):
1. DM price variance ____________________________
2. DM quantity variance ____________________________
3. DM cost variance ____________________________
4. DL rate variance ____________________________
5. DL efficiency variance ____________________________
6. DL efficiency variance ____________________________
the method used in class. Correct answers without work shown will receive zero points.