The Data Below Relate to a Product of Omaha Company

question 64

Essay

The data below relate to a product of Omaha Company.
$\begin{array}{lrr}\text { Standard costs }\\ \text {Materials, 3 pounds at \( \$ 7 \) per pound } & \text {\$21 per unit}\\ \text { Labor, 4 hours at \( \$ 18 \) per hour } & \text {\$72per unit}\\ \text {Budgeted production for the year } & \text {2,000units}\\ \text { Actual results were:} &\\ \text { Production } & 1,800 \text {units } \\ \text { Material purchases, 6,000 pounds} &\$48,230\\ \text { Labor, 7,420 hours } &\$140,170\\ \text {Material used in production } & 5,750 \text { pounds }\\\end{array}$

Required:
(Be sure to indicate whether the variance is favorable or unfavorable.)
a. Compute the direct material price variance.
b. Compute the direct material efficiency variance.
c. Compute the direct labor rate variance.
d. Compute the direct labor efficiency variance.

---

Definitions:

Package Label

Information found on a package, providing details about the product, its use, and safety instructions.

Milliliter

A unit of volume in the metric system, equivalent to one thousandth of a liter.

Ampicillin

A type of antibiotic used to treat a variety of bacterial infections by preventing bacteria from growing.

Capsules

Hollow, cylindrical dosage forms for oral administration, enclosing medications in a digestible outer shell, often made from gelatin or a plant-based alternative.