Nbspcalculate various variances from the given datathe

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Reference no: EM13355980

Calculate various variances from the given data.

The standards for one case of liquid weed killer are:

Direct materials	3 lbs. @ $6.00/lb
Direct labor	1.8hrs. @ $12.00/hr
Variable overhead (based on machine hours)	0.6hrs. @ $3.50/hr

During the week ended August 6, the following activity took place:

2390 machine hours were worked

11400 lbs. of raw material were purchased for inventory at a local cost $70680

3800 cases of finished product were produced

11290 lbs. of raw material were used

6720 labor hours were worked at an average rate of $12.25 per hour

$8126 actual variable overhead costs were incurred

Required:

Calculate each of the following variances and provide plausible explanations for the results:

a. Raw material purchase price variance:
b. Raw material usage variance:
c. Direct labor rate variance:
d. Direct labor efficiency variance:
e. Variable overhead spending variance:
f. Variable overhead efficiency variance:
Explanation of results:
g. Prepare a flexible budget based upon the production of 3800 cases. Remember to calculate the material spending budget based on purchases not production.

Reference no: EM13355980

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