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DATA INPUT
Containers (cases) of frozen food produced 725
Actual costs:
Variable overhead 5,500$
Fixed overhead 13,000
Actual labor cost 4,000 direct-labor hours 75,600
Actual material cost 15,000 pounds purchased and used 33,000
Standard costs per case:
Direct labor 5 hours at 18.00$ 90.00$
Direct material 20 pounds at 2.00$ 40.00
Variable overhead 5 hours at 1.50$ 7.50
Fixed overhead 5 hours at 3.00$ 15.00
152.50$
Annual budget information
Variable overhead 75,000$
Fixed overhead 150,000$
Planned activity for year 50,000 direct-labor hours
SOLUTION
Direct-material price variance = AQ x (AP* - SP)
= 15,000 x 2.20$ - 2.00$
Direct-material purchase price variance = PQ x (AP - SP)
= 15,000 x 2.20$ - 2.00$
Direct-material quantity variance = SP x (AQ - SQ*)
= 2.00$ x 15,000 - 14,500
Direct-labor rate variance = AH x (AR* - SR)
= 4,000 x 18.90$ - 18.00$
Direct-labor efficiency variance = SR x (AH - SH*)
Variable-overhead spending variance = actual VOH - (AQ x SVR)
= 5,500$ - 4,000 x 1.50$
Fixed-overhead volume variance =budgeted FOH - applied fixed overhead*
= 12,500$ - 10,875$
