Nowden Company has provided the following information Calcul

Nowden Company has provided the following information:

Calculate the following amounts:

Direct labor variances:

Labor rate variance:

Labor efficiency variance:

Spending variance:

Variable manufacturing variances:

Variable overhead rate variance:

Variable overhead efficiency variance:

Spending variance:   

Round all intermediate calculations to two decimal places.

You must format your answers as follows: for favorable variances: $x,xxx F

for unfavorable variances: $x,xxx U

Standard variable cost per unit: Direct material Direct labor Variable mfg overhead 12.00 60 ounces at $0.20 per ounce 10.00 0.5 hours at $20.00 per hour 4.80 0.4 hours at $12 per hour $26.80 Variable manufacturing overhead is applied to products on the basis of direct-labor hours 4,000 Actual variable cost per unit: Direct material purchased Direct material used in Direct labor Variable mfg overhead 250,000 ounces at $0.30 per ounce 240,000 ounces $ 75,000 S 31,775 1,550 hours @$20.50 per hour $19,995

Solution

Labor rate variance = AH*(AR - SR) =1550*(20.50-20.00) = $775 U

Labor efficiency variance = SR *(AH - SH) = 20.00*(1550-(4000*0.5))= 20.00*(1550-2000) = - 9000 = $9,000 F

Direct labor variance = labor rate variance + labor efficiency variance = 775 U + 9000 F = 8,225 F

Variable overhead rate variance = AH * (actual variable mfg overhead - Standard variable mfg overhead) =1550*((19995/1550)-12) = 1550*(12.90 - 12.00) = $1,395 U

Variable overhead efficiency variance = SR *(AH - SH) = 12*(1550-(4000*0.4)) = 12*(1550-1600) = - 600 =$600 F