Moates Corporation Makes a Product with the Following Standard Costs

question 90

Essay

Moates Corporation makes a product with the following standard costs: In January the company produced 5,800 units using 38,740 kilos of the direct material and 1,110 direct labor-hours. During the month, the company purchased 41,000 kilos of the direct material at a total cost of $49,200. The actual direct labor cost for the month was $20,979 and the actual variable overhead cost was $6,993. 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 labor rate variance.
e. Compute the variable overhead efficiency variance.
f. Compute the variable overhead rate variance.

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Definitions:

Opportunity Cost

The financial sacrifice of skipping the subsequent best choice when a decision is made.

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Production Possibility Frontier

A figure displaying every possible maximum production scenario for two different goods, with fixed inputs such as resources and other variables.