Reference no: EM133035295

Question - Standards costs and actual costs for direct materials, direct labor, and factory overhead incurred for the manufacture of 2,500 units of product were as follows:

Standard Costs Actual Costs

Direct materials 8,000 pounds at $4.50 7,850 pounds at $4.20

Direct labor 5,000 hours at $18 5,250 hours at $19.00

Factory overhead Rates per machine hour, based on 100% of normal capacity of 6,000 machine hours:

Variable costs $2.30 $11,750 variable cost

Fixed costs, $.90 $ 5,400 fixed cost

Two machine hours are required per unit

Required -

a. Determine the price variance, quantity variance, and total material cost variance.

b. Determine the time variance, rate variance, and total direct labor cost variance.