Question

Material, Labor, and Variable Overhead Variances
The following summarized manufacturing data relate to Thomas Corporation's April operations, during which 2,000 finished units of product were produced. Normal monthly capacity is 1,100 direct labor hours.

			Standard Units Costs			Total Actual Costs
Direct material
Standard (2 lb. @ $12.00/lb.)			$24
Actual (4,200 lb. @ $12.80/lb.)					$53,760
Direct labor
Standard (0.5 hr. @ $27/hr.)			$13.50
Actual (950 hrs. @ $26/hr.)					24,700
Variable overhead
Standard (0.5 hr. @ $9/hr.)			$4.50
Actual			-		9,450
Total			$42		$87,910

Determine the following variances:

Do not use negative signs with any of your answers. Next to each variance answer, select either "F" for Favorable or "U" for Unfavorable.

Materials Variances
Actual cost:	Answer
Split cost:	Answer
Standard cost:	Answer
Materials price	Answer	AnswerFU
Materials efficiency	Answer	AnswerFU

Labor Variances
Actual cost:	Answer
Split cost:	Answer
Standard cost:	Answer
Labor rate	Answer	AnswerFU
Labor efficiency	Answer	AnswerFU

Variable Overhead Variances
Actual cost:	Answer
Split cost:	Answer
Standard cost:	Answer
Variable overhead spending	Answer	AnswerFU
Variable overhead efficiency	Answer	AnswerFU

Answer 1

Material variances:
Actual cost	$53,760
Split cost (4,200 * $12)	50,400
Standard cost (2,000*2*$12)	48,000
Material price variance ($50,400-53,760)	3,360	U
Material quantity variance ($48,000-50,400)	2,400	U
Labor variances:
Actual cost	$24,700
Split cost (950*$27)	25,650
Standard cost (2,000*0.5*$27)	27,000
Labor rate variance ($25,650-24,700)	950	F
Labor efficiency variance ($27,000-25,650)	1,350	F
Variable overhead variances:
Actual cost	$9,450
Split cost (950*$9)	8,550
Standard cost (1,000*$9)	9,000
Variable overhead spending variance ($8,550-9,450)	900	U
Variable overhead efficiency variance ($9,000-8,550)	450	F