Reference no: EM131840456

Problem - The Liski Company has established standards as follows:

Direct material ................................ 3 pounds @ $4/pound = $12 per unit

Direct labor .................................... 2 hours @ $8/hour = $16 per unit

4 Variable overhead ............................. 2 hours @ $5/hour = $10 per unit

Actual production figures for the past year were as follows:

Units produced ................................... 500

Direct material used ............................. 1,600 pounds

Direct material purchased (3,000 pounds)... $12,300

Direct labor cost (950 hours) .................. $7,790

Variable overhead cost incurred ............... $4,655

1. The materials price variance is:

a. $160 U

b. $6,300 U

c. $300 U

d. $150 U

2. The materials quantity variance is:

a. $ 400 U

b. $410 F

c. $410 U

d. $ 6,000 U

3. The labor rate variance is:

a. $210 F

b. $190 F

c. $399 F

d. $190 U

4. The labor efficiency variance is:

a. $400 F

b. $800 F

c. $800 U

d. $500 F

5. The variable overhead spending variance is:

a. $345 F

b. $95 F

c. $655.50 F

d. $345 U

6. The variable overhead efficiency variance is:

a. $500 F

b. $500 U

c. $245 F

d. $250 F