Klacic Corporation Makes a Product with the Following Standard Costs

question 71

Essay

Klacic Corporation makes a product with the following standard costs:
The company reported the following results concerning this product in May.
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
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:

Liquidity

A measure of a company's or an individual's ability to meet short-term financial obligations; the ease with which assets can be converted into cash.

Marketability

The ease with which a product or service can be sold or marketed in a particular market.

Profitability

The ability of a company to generate earnings relative to its revenue, assets, or equity over a specific period, indicating its financial health.

Vertical Analysis

A financial method that expresses each item within a financial statement in percentage terms of a base figure for the same time period, facilitating comparison.