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Question: The following information describes production activities of Truzor Manufacturing for the year:
Actual raw materials used . . . . . . . . . 16,000 lbs. at $4.05 per lb.
Actual factory payroll . . . . . . . . . . . . . 5,545 hours for a total of $72,085
Actual units produced . . . . . . . . . . . . 30,000
Budgeted standards for each unit produced are 0.50 pounds of raw material at $4.15 per pound and 10 minutes of direct labor at $12.50 per hour.
(1) Compute the direct materials price and quantity variances. Round to the nearest whole dollar.
(2) Compute the direct labor rate and efficiency variances. Indicate whether each variance is favorable or unfavorable.
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Circle K Furniture has a contribution margin ratio of 16%. If fixed costs are $176,800, how many dollars of revenue must the company generate in order to reach the break-even point?
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