Reference no: EM13582678

Julius Company developed the following standard costs for its product for 2012

Standard Cost Card

                                                                                                 Unit Standard Cost

Direct materials                  (6 pounds @ $3 per pound)                 $18

Direct labor                         (4 hours @ $10 per hour)                     40

Manufacturing overhead

Variable                              (5 hours @ $4 per hour)                         20

Fixed                                  (3 hours @ $3 per hour)                          9

                                                                                                          $87

The company planned to work 220,000 direct labor hours and produce 55,000 units of product in 2012.

Actual results for 2012 are as follows:

• 52,000 units of product were produced.
• Actual direct materials purchased and used during the year amounted to 320,000 pounds at a cost of $951,600.
• Actual direct labor costs were $1,800,000 for 170,000 direct labor hours worked.
• Total actual manufacturing overhead incurred amounted to $1,435,000.

Instructions

Calculate the following variances showing all computations supporting your answers. Indicate if the variances are favorable (F) or unfavorable (U).

(a)   Direct materials price and direct material quantity variances.

(b)   Direct labor price and direct labor quantity variances.

(c)   Overhead controllable and overhead volume variances.