Doby Corporation Makes a Product with the Following Standard Costs

question 293

Essay

Doby Corporation makes a product with the following standard costs:
In July the company produced 4,800 units using 13,450 ounces of the direct material and 970 direct labor-hours. During the month the company purchased 14,600 ounces of the direct material at a price of $7.20 per ounce. The actual direct labor rate was $16.20 per hour and the actual variable overhead rate was $5.40 per hour. The materials price variance is computed 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:

Organizing Activities

Activities aimed at arranging or structuring resources and operations, often within the context of management and business operations.

Cash Flow

The total amount of money being transferred into and out of a business, especially affecting liquidity.

Investing Activities

Transactions involving the purchase and sale of long-term assets and investments.

Accounts Payable

Money owed by a business to its suppliers shown as a liability on a company's balance sheet.