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Thompson Company uses a standard cost system for its single product. The following data are available:...

Thompson Company uses a standard cost system for its single product. The following data are available:
Actual experience for the current year:

  • Raw materials purchased and used (12,000 yards at $13.00 per yard)         $156,000
  • Direct labor costs (10,200 hours at $10.00 per hour) ………… $102,000
  • Actual variable overhead cost …………………………………............... $84,150
  • Units produced ……………………………………………….......................... 12,600 units

Standards per unit of product:

  • Raw Materials................. 1.1 yarts at $15.00 per yard
  • Direct Labor..................... 0.8 hours at $9.50 per hour
  • Variable Overhead........ $8 per direct labor hour

Required: Show Your Work
Compute the following variances for raw materials, direct labor, and variable overhead, assuming that the price variance for materials is recognized at point of usage:

a. Direct materials price variance and Direct materials quantity variance.


b. Direct labor rate variance and Direct labor efficiency variance.


c. Variable overhead rate variance and Variable overhead efficiency variance.

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