Question

The standard cost sheet for Chambers Company, which manufactures one product, follows: Direct materials, 30 yards at $2.00 per yard Direct labor, 6 hours at $25 per hour Factory overhead applied at 7e% of direct labor (variable costs = $75; fixed costs $30) Variable selling and administrative Fixed selling and adminisstrative $ 60 158 105 88 56 451 Total unit costs Standards have been computed based on a master budget activity level of 30.400 direct labor-hours per month. Actual activity for the past month was as follows: Materials used 190, eee yards at $2.20 per yard 29,50e hours at $26.80 per hour $550,eee 4,7ee units Direct labor Total factory overhead Production Requlred: Prepare variance analyses for the variable and fixed costs. Materials are purchased as they are used. (Do not round Intermedlate calculations. Indicate the effect of each varlance by selecting "F" for favorable, or "U" for unfavorable. If there Iis no effect, do not select elther option.)

Answer 1

Direct Material Variances Actual Cost AQ АР SP SP AQ 190000 Standard Cost SQ 141000 x 282,000 190000 X x 380,000 2.2 418,000 38,000 98,000 Direct Material Price Variance Direct Material Efficiency Variance Total Direct Material Variance 38,000 (U) 98,000 (U) 136,000 (U) Direct Labor Variances Actual Cost AH SR SR AR 26.80 AH 29500 Standard Cost SH 28200 X 705,000 X x 737,500 29500 25 25 790,600 53,100 32,500 Direct Labor Price Variance Direct labor rate Efficiency Variance Total Direct Labor Variance 53,100 (U) 32,500 (U) 85,600 (0)

Note; Actual variable overheads have not been provided