Reference no: EM132747949
Question - Detech Company developed the following standard costs for its product for 2019:
Detech COMPANY Standard Cost Card
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Cost Elements
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Standard Quantity
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×
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Standard Price
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=
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Standard Cost
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Direct materials
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4 kilograms
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RM6
|
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RM24
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Direct labor
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2 hours
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11
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22
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Variable overhead
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2 hours
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5
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10
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Fixed overhead
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2 hours
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3
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6
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|
|
|
|
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RM62
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The company expected to work at the 130,000 direct labor hours level of activity and produce 65,000 units of product.
Actual results for 2020 were as follows:
- 60,000 units of product were actually produced.
- Direct labor costs were RM1,250,000 for 125,000 direct labor hours actually worked.
- Actual direct materials purchased and used during the year cost RM1,386,000 for 277,200 kilograms.
- Total actual manufacturing overhead costs were RM900,000.
Instructions - Compute the following variances for Detech Company for 2020 and indicate whether the variance is favorable or unfavorable.
1. Direct materials price variance.
2. Direct materials quantity variance.
3. Direct labor price variance.
4. Direct labor quantity variance.
5. Total overhead variance.
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