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Discuss the direct material purchases variance is computed

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Reference no: EM131753960

Manik Plc Ltd. makes a product with the following standard costs:

Inputs: Unit of Input Units per item Price or rate
Direct Materials: pints 32 $28/pint
Direct Labor: direct labor hours 28 $10/direct labor hour
Variable Overhead: direct labor hours $8/direct labor hour

The company reported the following results concerning this product in December.

Actual output: 178 items
Raw Materials used: 5,655 pints
Raw Material purchased: 6,169 pints
Actual direct labor hours: 4,450 hours
Actual cost of raw materials purchased: $160,394
Actual direct labor cost: $53,400
Actual variable overhead cost: $40,050

Oliver applies variable overhead on the basis of direct labor hours. The direct material purchases variance is computed when the materials are purchased. What are the following variances? Be sure to note if they are favorable or unfavorable.

Part 1: Direct Material quantity variance: 

Part 2: Direct Material price variance:

Part 3: Direct Labor efficiency variance:

Part 4: Direct Labor rate variance:

Reference no: EM131753960

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