Reference no: EM131820659

Question: Review Problem on Standards and Flexible Budgets; Answers Are Provided The Des Moines Leather Company makes a variety of leather goods. It uses standard costs and a flexible budget to aid planning and control. Budgeted variable overhead at a 45,000-direct-labor-hour level is $81,000. During April, the company had a favorable variable-overhead efficiency variance of $2,970. Material purchases were $241,900. Actual direct-labor costs incurred were $422,100. The direct-labor quantity variance was $15,300 unfavorable. The actual average wage rate was $.60 lower than the standard average wage rate. The company uses a variable-overhead rate of 20% of standard direct-labor cost for flexible budgeting purposes. Actual variable overhead for the month was $92,250. Compute the following amounts; use U or F to indicate whether variances are unfavorable or favorable.

1. Standard direct-labor cost per hour

2. Actual direct-labor hours worked

3. Total direct-labor price variance

4. Total flexible budget for direct-labor costs

5. Total direct-labor flexible-budget variance

6. Variable-overhead spending variance in total