Reference no: EM132690347

WSW has developed the following standards for one of its products: STANDARD VARIABLE COST CARDONE UNIT OF PRODUCT

Direct materials: 20 square feet ´ $5 per square foot

$100.00

Direct labour: 4 hours ´ $7 per hour

28.00

Variable overhead: 4 hours ´ $4 per hour

  16.00

Total standard variable cost per unit

$144.00

The company records materials price variances at the time of purchase.

The following activities relate to the month of April:

Materials purchased (actual)

90,000 square feet at $5.10 per sq. foot

Materials used (actual)

82,000 square feet

Units produced (actual)

4,000 units

Units budgeted (budgeted)                                  

4,500 units

Direct labour (actual)

15,000 hours at $7.25 per hour

Variable overhead (actual)

$59,000

Required:

a. Calculate the labour efficiency variance and indicate whether it is favorable or unfavorable.

b. Calculate the variable overhead spending variance and indicate whether it is favorable or unfavorable.

c. Calculate the variable overhead efficiency variance and indicate whether it is favorable or unfavorable.