Question

a summary of Blake Company's manufacturing variance report for June 2016 is as follows:

(7600 units)
dir material std 106400
actual 105400
variances 1000

dir lab std 84930
actual 90600
variances 5670

var OH std 41610
actual 39910
variances 1700

fixed OH std 102600
actual 39910
no variances

Standard material cost per unit of product is 4 lbs at 3.50 lbs. standard dir labor hours cost is .75 hrs at 14.90 hr. Actual material cost represents 31000 lbs purchased at 3.40 per lb.
total actual labor cost represents 6000 hrs at 15.10 hr. According to standards, var OH rate is applied at 7.30 per dir labor hr based on normal capacity of 6000 dir lab hrs or 8000 units of product. assume all fixed OH is applied to WIP inventory.

prepare the following for materials variances, labor variances and var. OH variances respectively..
actual cost
split cost
standard cost
labor/marerial/var OH rate
labor/material/var oh rate efficiency

Answer 1

F means Favorable and U means Unfavorable
Direct material
Actual cost	$        105,400
Split cost (31000*3.50)	$        108,500
Standard cost (7600*4*3.50)	$        106,400
Material Rate Variance (Actual cost - Split cost) (If amount is negative then Favorable variance, otherwise unfavorable variance)	$            3,100	F
Material efficiency Variance (Split cost - Standard cost) (If amount is negative then Favorable variance, otherwise unfavorable variance)	$            2,100	U
Direct labor
Actual cost	$          90,600
Split cost (6000*14.90)	$          89,400
Standard cost (7600*0.75*14.90)	$          84,930
Labor rate (Actual cost - Split cost) (If amount is negative then Favorable variance, otherwise unfavorable variance)	$            1,200	F
Labor efficiency (Split cost - Standard cost) (If amount is negative then Favorable variance, otherwise unfavorable variance)	$            4,470	F
Variable overhead
Actual cost	39910
Split cost (6000*7.30)	43800
Standard cost (7600*0.75*7.30)	41610
Variable overhead Rate (Actual cost - Split cost) (If amount is negative then Favorable variance, otherwise unfavorable variance)	3890	F
Variable overhead efficiency (Split cost - Standard cost) (If amount is negative then Favorable variance, otherwise unfavorable variance)	2190	U