Duboise Corporation makes a product with the following standard costs:??Standard Quantityor HoursStandard Price or RateStandard Cost Per Unit?Direct materials 9.3 ounces $7.00 per ounce$65.10?Direct labor0.3 hours$21.00 per hour$6.30?Variable overhead0.3 hours $2.00 per hour$0.60The company reported the following results concerning this product in October.?Originally budgeted output1,800 units?Actual output1,900 units?Raw materials used in production18,800 ounces?Actual direct labor-hours580 hours?Purchases of raw materials20,900 ounces?Actual price of raw materials$7.20 per ounce?Actual direct labor rate$21.70 per hour?Actual variable overhead rate$1.80 per hourThe materials price variance is recognized when materials are purchased.
Variable overhead is applied on the basis of direct labor-hours.Required:a. Compute the materials quantity variance.b. Compute the materials price variance.c. Compute the labor efficiency variance.d. Compute the labor rate variance.e. Compute the variable overhead efficiency variance.f. Compute the variable overhead rate variance.
What will be an ideal response?
a. SQ = 1,900 units × 9.3 ounces per unit = 17,670 ounces
Materials quantity variance = (AQ - SQ) × SP
= (18,800 ounces - 17,670 ounces) × $7.00 per ounce
= (1,130 ounces) × $7.00 per ounce
= $7,910 U
b. Materials price variance = AQ × (AP - SP)
= 20,900 ounces × ($7.20 per ounce - $7.00 per ounce)
= 20,900 ounces × ($0.20 per ounce)
= $4,180 U
c. SH = 1,900 units × 0.3 hours per unit = 570 hours
Labor efficiency variance = (AH - SH) × SR
= (580 hours - 570 hours) × $21.00 per hour
= (10 hours) × $21.00 per hour
= $210 U
d. Labor rate variance = AH × (AR - SR)
= 580 hours × ($21.70 per hour - $21.00 per hour)
= 580 hours × ($0.70 per hour)
= $406 U
e. SH = 1,900 units × 0.3 hours per unit = 570 hours
Variable overhead efficiency variance = (AH - SH) × SR
= (580 hours - 570 hours) × $2.00 per hour
= (10 hours) × $2.00 per hour
= $20 U
f. Variable overhead rate variance = AH × (AR - SR)
= 580 hours × ($1.80 per hour - $2.00 per hour)
= 580 hours × (-$0.20 per hour)
= $116 F
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