Reference no: EM133088226

Question - Venice Corporation has provided the following standard costing data, per unit below:

Direct Materials 90 kg at $4 per kg

Direct Labour 4 hours at $25/hour

Variable Overhead 4 hours at $8/DL hour

Fixed Overhead $30

The company expected to produce 1,100 units for the upcoming month, August 2016.

During August, 1,050 units were produced. The company purchased and used 97,000 kilograms of material at a total cost of $368,600. Direct labor used was 4,100 hours at a total cost of $110,700. Variable overhead cost was $35,200. Actual fixed overhead cost was $30,900. Fixed overhead is allocated on the basis of direct labor hours. The normal volume is the same as the planned volume for August.

Required -

a. Compute the direct materials price variance. Indicate if it favorable (F) or unfavorable (U).

b. Compute the direct materials quantity variance. Indicate if it is favorable (F) or unfavorable (U).