Wagner Company Developed the Following Standard Costs for Its Product $\bullet$

question 36

Essay

Wagner Company developed the following standard costs for its product for 2011:
The company expected to work at the 60,000 direct labor hours level of activity and produce 30,000 units of product.
Actual results for 2011 were as follows:
$\bullet$ 28,400 units of product were actually produced.
$\bullet$ Direct labor costs were $546,000 for 56,000 direct labor hours actually worked.
$\bullet$ Actual direct materials purchased and used during the year cost $554,400 for 115,500 pounds.
$\bullet$ Total actual manufacturing overhead costs were $340,000.
Instructions
Compute the following variances for Wagner Company for 2011 and indicate whether the variance is favorable or unfavorable.
1. Direct materials price variance.
2. Direct materials quantity variance.
3. Direct labor price variance.
4. Direct labor quantity variance.
5. Overhead controllable variance.
6. Overhead volume variance.

---

Definitions:

Market Baskets

A collection of goods and services used as a standard way of tracking the cost of living or inflation over time.

Preferences

In economics, this refers to the ordering of alternatives based on their utility, showing the subjective tastes and choices of individuals.

Complete

Fully accomplished or having all necessary parts or steps.

Transitivity

Transitivity in decision making refers to the consistency among choices, where if option A is preferred over B and B over C, then A should be preferred over C.