Duboise Corporation Makes a Product with the Following Standard Costs

question 216

Essay

Duboise Corporation makes a product with the following standard costs:
The company reported the following results concerning this product in October.
The materials price variance is recognized 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:

Traceable Fixed Expense

Costs that can be directly linked to a specific product, department, or segment and do not change with the level of production.

Net Operating Income

A financial metric that calculates a company's profitability from its core business functions, excluding taxes and interest.

Price Reduction

Price reduction refers to lowering the selling price of goods or services, typically to attract more customers or sell excess inventory.

Absorption Costing

In this particular accounting model, the total cost of a product includes expenses related to direct materials, direct labor, and overhead costs, whether they are variable or remain fixed.