Question

Majer Corporation makes a product with the following standard costs:

	Standard Quantity or Hours			Standard Price or Rate			Standard Cost Per Unit
Direct materials		6.7	ounces	$	2.00	per ounce	$	13.40
Direct labor		0.3	hours	$	14.00	per hour	$	4.20
Variable overhead		0.3	hours	$	2.00	per hour	$	.60

The company reported the following results concerning this product in February.

Originally budgeted output		5,300	units
Actual output		8,100	units
Raw materials used in production		30,400	ounces
Actual direct labor-hours		1,940	hours
Purchases of raw materials		31,400	ounces
Actual price of raw materials	$	52.90	per ounce
Actual direct labor rate	$	62.40	per hour
Actual variable overhead rate	$	1.10	per hour

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 1. The variable overhead rate variance for February is?

Majer Corporation

makes a product with the following standard costs:

	Standard Quantity or Hours			Standard Price or Rate
Direct materials		10.0	kilos	$	7.50	per kilo
Direct labor		0.4	hours	$	35.00	per hour
Variable overhead		0.4	hours	$	7.50	per hour

The company reported the following results concerning this product in August.

Actual output		4,700	units
Raw materials used in production		30,530	kilos
Purchases of raw materials		33,100	kilos
Actual direct labor-hours		1,130	hours
Actual cost of raw materials purchases	$	210,920
Actual direct labor cost	$	24,236
Actual variable overhead cost	$	9,040

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 2. The variable overhead rate variance for August is?

Answer 1