thanks for any help Aaha Inc. produces premium protective automotive covers. The

Question

thanks for any help

Aaha Inc. produces premium protective automotive covers. The direct materials and direct labour standards for one car cover are as follows: Standard Quantity Standard Price Standard or Rate $11 per metre $93.50 $19 per hour 4 $ 8per hour or Hours Cost 8.5 metres of cloth Direct materials Direct labour Variable overhead 0 hours 0 hours 2 Budgeted fixed overhead cost is $19,300, and the normal production volume is 2,985 car covers. Overhead is applied on the basis of direct labour-hours. In September, the following activity was recorded: 23,800 metres of cloth were purchased at a cost of $10.50 per metre All of the purchased material was used to produce 2,800 car covers. .535 direct labour-hours were recorded at a total labour cost of $10,165. Actual variable overhead cost was $4,600, and fixed overhead cost was $18,700.

Explanation / Answer

4/19= 0.210526 direct labor efficiency variance (AH     - SH)*Standard rate (535 - 2800*210526)*19 1035 F total direct labor cost variance 10165- 2800*4 1035 F variable overhead efficiency variance 2/8= 0.25 (AH     - SH)*Standard rate (535 -2800*.25)*8 1,320 F variable overhead total variance 4600 - 2800*2 1,000 F

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