Leerar Corporation Makes a Product with the Following Standard Costs

question 112

Essay

Leerar Corporation makes a product with the following standard costs: 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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Definitions:

Stealing

The act of taking someone else's property without permission or legal right and with no intention to return it.

Personality

The combination of characteristics or qualities that form an individual's distinctive character, influencing behaviors, thoughts, and emotions.

Reciprocal Determinism

A concept in psychology that suggests individual behavior, environment, and cognition are interrelated and influence each other.

Trait

A characteristic or quality of an organism, often inherited, that can be physical like height or behavioral like shyness.