Reference no: EM132523568

March Inc. produces and sells one product. The budgeted (standard) cost for one unit follows:

Budgeted Cost per unit of output

Direct materials 5 kg @ $1.50 per kg

Direct Labour 4 hrs @ $15.00 per hour

Factory overhead (allocated based on direct labour hours)

Variable 4 hrs @ $5.00 per hour

Normal activity per month 8,000 direct labour hours

The actual data for the current month is:

Units produced and sold 1,800 units

Direct materials purchased 10,200 kg @ $1.48 per kg

Direct materials used 9,500 kg

Direct labour costs for the month $122,100

Direct labour pay rate $16.50 per hour

Actual hours 7,400 hours

Total variable overhead costs $26,000

Question 1: Calculate the following variances. You must correctly identify the amount of the variances and if they are F (favorable) or U (unfavorable).

1 Static Budget Variance

2 Flexible Budget Variance

3 Sales Volume Variance

4 Direct material rate variance

5 Direct material efficiency variance

6 Direct labour rate variance

7 Direct labour efficiency variance

8 Variable overhead rate variance

9 Variable overhead efficiency variance