Meera Corporation Makes a Product with the Following Standard Costs

question 58

Essay

Meera Corporation makes a product with the following standard costs:
$$\begin{array} { l c c } { \text { Inputs } } & \text { Standard Quantity or Hours } & \text { Stardard Price or Rate } \\\text { Direct materials } & 8 .1 \text { lounces } & \$ 3.00 \text { per hour } \\\text { Direct labor } & 0.5 \text { hours } & \$ 18.00 \text { per hour } \\\text { Variable overhead } & 0.5 \text { hours } & \$ 2.00 \text { per hour }\end{array}$$
In December the company produced 4,200 units using 34,870 ounces of the direct material and 1,900 direct labor-hours. During the month, the company purchased 39,700 ounces of the direct material at a total cost of $111,160. The actual direct labor cost for the month was $35,530 and the actual variable overhead cost was $3,990. 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 direct labor rate variance.
e. Compute the variable overhead efficiency variance.
f. Compute the variable overhead rate variance.

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