Reference no: EM132974544

Question - The standard costs for a product produced by Grandison Company are as follows:

Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit

Direct materials 6.5 ounces $2.00 per ounce $13.00

Direct labor 0.2 hours $23.00 per hour $4.60

Variable overhead 0.2 hours $6.00 per hour $1.20

The following results are reported for the month.

Budgeted fixed overhead $2,240

Budgeted output 2,700 units

Actual output 2,800 units

Raw materials used in production 19,380 ounces

Purchases of raw materials 21,400 ounces

Actual direct labor-hours 500 hours

Actual raw materials purchase cost $40,660

Actual direct labor cost $12,050

Actual variable overhead cost $3,100

The company applies both variable and fixed overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.

Required - Show your work for ANY credit. Label each variance as Favorable or Unfavorable

1. Calculate the direct materials price variance for the month.

2. What is the predetermined fixed overhead rate for the month?

3. Calculate the fixed overhead volume variance for the month.