Reference no: EM13574866
Cajun Corporation manufactures a labor-intensive product.The cost standards developed by Cajun appear below. Manufacturing overhead at Cajun is applied to production on the basis of standard direct labor-hours:
|
Standard Quantity per unit |
Standard cost per ounce or hour |
Standard cost per unit |
| Direct materials |
0.75 ounces |
$20.00 |
$15.00 |
| Direct labor |
1.2 hours |
$12.00 |
14.40 |
| Variable overhead |
1.2 hours |
$3.00 |
3.60 |
| Fixed overhead |
1.2 hours |
$5.00 |
6.00 |
| Total standard cost per unit |
|
|
$39.00 |
The standard above were based on an expected annual volume of 8,000 units. The actual results for last year were as follows:
Number of unit produced ............................................. 8,200
Direct labor-hours incurred..........................................10,000
Ounces of direct materials purchased...........................7,900
Ounces of direct materials used in production..............6,070
Total cost of direct materials purchased..................$156,815
Total direct labor cost...............................................$122,800
Total variable overhead cost....................................$28,600
Total fixed manufacturing overhead cost.................$47,500
Required:
Compute the following variances for Cajun.
a) Materials price variance
b) Materials quantity variance
c) Labor rate variance
d) Variable overhead rate variance
e) Variable overhead efficiency variance
f) Fixed overhead budget variance