Reference no: EM13391233

Glitzy Company produces several products in its factory, including a wedding gown. The company uses a standard costing system to assist in the control of costs. According to the standards that have been set for wedding gowns, the factory should work 780 direct labour-hours each month and produce 1,950 gowns. The standard costs associated with this level of production activity are as follows:

Total                      Per Unit

of Product

Direct Materials ....................................                       $35,490 $18.20

Direct Labour .......................................                         $7,020                   $3.60

Variable Manufacturing Overhead

  (based on direct labour-hours) ...............              $ 2,340                  $ 1.20

                                                                                                                                $23.00

During June, the factory worked only 760 direct-labour hours and produced 2,000 wedding gowns. The following actual costs were recorded during the month:

 Total                     Per Unit

of Product

Direct Materials (6,000 yards)....................              $36,000 $18.00

Direct Labour .......................................                         $ 7,600                  $ 3.80

Variable Manufacturing Overhead ...............         $ 3,800                  $ 1.90

                                                                                                                                $23.70

At standard, each robe should require 2.8 yards of material. All of the materials purchased during the month were used in production.

REQUIRED:

A.  Compute the following variances for June:

i. Direct Material Price Variance

ii. Direct Material Quantity Variance

iii. Direct Labour Rate Variance

iv. Direct Labour Efficiency Variance

v. Variable Manufacturing Overhead Spending Variance

Variable Manufacturing Overhead Efficiency Variance