Prepare variance analyses for the variable and fixed costs

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Reference no: EM131977415

Problem

The standard cost sheet for Chambers Company, which manufactures one product, follows:

Direct materials, 40 yards at $3.50 per yard $ 140
Direct labor, 5 hours at $20 per hour 100
Factory overhead applied at 85% of direct labor 85
(variable costs = $60; fixed costs = $25)
Variable selling and administrative 81
Fixed selling and administrative 57
Total unit costs $ 463

Standards have been computed based on a master budget activity level of 30,500 direct labor-hours per month. Actual activity for the past month was as follows:

Materials used 245,000 yards at $3.60 per yard
Direct labor 30,900 hours at $21.60 per hour
Total factory overhead $ 560,000
Production 5,700 units

Required:

Prepare variance analyses for the variable and fixed costs. Materials are purchased as they are used.

Reference no: EM131977415

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