Doby Corporation Makes a Product with the Following Standard Costs

question 50

Essay

Doby Corporation makes a product with the following standard costs:
In July the company produced 4,800 units using 13,450 ounces of the direct material and 970 direct labor-hours. During the month the company purchased 14,600 ounces of the direct material at a price of $7.20 per ounce. The actual direct labor rate was $16.20 per hour and the actual variable overhead rate was $5.40 per hour. The materials price variance is computed when materials are purchased. Variable overhead is applied on the basis of direct labor-hours.
Required:
a. Compute the materials quantity variance.
b. Compute the materials price variance.
c. Compute the labor efficiency variance.
d. Compute the labor rate variance.
e. Compute the variable overhead efficiency variance.
f. Compute the variable overhead rate variance.

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Definitions:

Instinct

Instinct refers to an innate, biological tendency to perform a particular behavior pattern in response to specific environmental stimuli, without the need for learning or experience.

Identically

In exactly the same manner, form, or degree; having no differentiation.

Individual

Refers to a single human being as distinct from a group, community, or society.

Experimental Settings

Controlled environments where researchers manipulate variables to study their effects on subjects.