Silmon Corporation makes a product with the following standard costs: In June th

Question

Silmon Corporation makes a product with the following standard costs:

In June the company produced 4,300 units using 16,950 grams of the direct material and 2,470 direct labor-hours. During the month the company purchased 24,200 grams of the direct material at a price of $8.80 per gram. The actual direct labor rate was $16.60 per hour and the actual variable overhead rate was $2.90 per hour. The materials price variance is computed when materials are purchased. Variable overhead is applied on the basis of direct labor-hours.

Compute the following variances for raw materials, direct labor, and variable overhead, assuming that the price variance for materials is recognized at point of purchase: (Input all amounts as positive values. Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)

Silmon Corporation makes a product with the following standard costs:

Explanation / Answer

$ Direct materials quantity variance 5,490 U Direct material price variance 4,840 F Direct labor efficiency variance 5,120 U Direct labor rate variance 1,482 U Variable overhead efficiency variance 960 U Variable overhead rate variance    247 F

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