LivingstonCorporation recently implemented a standard cost system. Thecompany’s

ID: 2433611 • Letter: L

Question

LivingstonCorporation recently implemented a standard cost system. Thecompany’s cost accountant has provided the following data toperform a variance analysis for May:

Standard Cost Information

Direct Material Standard Price

$12 Per pound

Standard Quantity Allowed Per Unit

4 pounds per unit

Direct Labor Standard Rate

$7 per hour

Standard Hours allowed Per Unit

0.5 hours per unit

Fixed Overhead Budgeted

$24,000 per month

Normal Level of Production

12,000 units per month

Variable Overhead Application Rate

$1.80 per unit

Fixed Overhead Application Rate

($24,000/12,000units)

$2.00 per unit

Total Overhead Application Rate

3.80 per unit

Actual Cost Information

Cost of Material Purchased & Used

$429,000

Pounds of material Purchased & Used

39,000 pounds

Cost of Direct Labor

$23,100

Hours of Direct Labor

4,200 hours

Cost of Variable Overhead

$17,750

Cost of Fixed Overhead

$24,200

Actual Volume of Production

10,400 units

Computethe following variances. Indicate whether each variance isfavorable (F) or unfavorable (U):

(a)Materials price variance: $__________

(b)Materials quantity variance: $__________

(d) Laborefficiency variance: $__________

(e)Overhead spending variance: $__________

(f)Overhead volume variance: $__________