Bullseye Company manufactures dartboards. Its standard cost information follows:

Question

Bullseye Company manufactures dartboards. Its standard cost information follows: Bullseys has the following actual results for the month of September: Calculate the direct materials price, quantity, and total spending variances for Bullseye. (Do not Round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Calculate the direct labor rate, efficiency, and total spending variances for Bullsey. (Do not Round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable.) Calculate the variable overhead rate, efficiency, and total spending variances for Bullseye. (Do not Round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable/overapplied and "U" for unfavorable/underapplied.)

Explanation / Answer

1.

Direct Material Rate Variance = (Standard Rate - Actual Rate) * Actual quantity used

= (2.10 - 2.20) 370000 = $37000U

Direct Material Quantity Variance = (Standard Quantity - Actual Quantity) * Standard Rate

= (360000 - 370000) 2.10 = $21000U

Direct Material Spending Variance = 756000 - 814000 = $37000U + $21000U = $58000U

2.

Direct Labor Rate Variance = (Standard Rate - Actual Rate) * Actual hours used

= (10 - 9.10) 188000 = $169200F

Direct Labor Efficiency Variance = (Standard hours - Actual hours) * Standard Rate

= (180000 - 188000) * 10 = $80000U

Direct Material Spending Variance = 1800000 - 1710800 = $169200F + $80000U = $89200F

3.

Variable overhead Rate Variance = (Standard Rate - Actual Rate) * Actual hours used

= 75200 - 73000 = $2200F

Variable overhead Efficiency Variance = (Standard hours - Actual hours) * Standard Rate

= (180000 - 188000) * 0.40 = $3200U

Variable overhead Spending Variance = 72000 - 73000 = $2200F + $3200U = $1000U

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