Question

Fortes Inc. has provided the following data concerning one of the products in its standard cost system. Materials price variances is calculated on material purchased and materials quantity is based on Material used in production. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.

Inputs	Standard Quantity or Hours per Unit of Output			Standard Price or Rate
Direct materials		8.7	ounces	$	6.80	per ounce
Direct labor		0.6	hours	$	28.70	per hour
Variable manufacturing overhead		0.60	hours	$	5.10	per hour

The company has reported the following actual results for the product for April:

Actual output		6300	units
Raw materials purchased		48,900	ounces
Actual cost of raw materials purchased	$	316,540
Raw materials used in production		54,840	ounces
Actual direct labor-hours		3530	hours
Actual direct labor cost	$	105,850
Actual variable overhead cost	$	17,090

Required:

Enter all numbers as positive and rounded to the nearest dollar
Materials price variance	$
Materials quantity variance	$
Labor rate variance	$
Labor efficiency variance	$
Variable overhead rate variance	$
Variable overhead efficiency variance	$

Answer 1

Material Price Variance	$                                                  17,921 or $ 15,980	Favourable-F
Material Quantity Variance	$                                                        204.00	Unfavourable-U
Labor Rate Variance	$                                                     4,539.00	Unfavourable-U
Labour Efficiency Variance	$                                                     7,175.00	Favourable-F
Variable Overhead Rate Variance	$                                                        913.00	Favourable-F
Variable Overhead Efficiency Variance	$                                                     1,275.00	Favourable-F

--Working

Material Price Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Quantity
(	$                                6.80	-	$                       6.47	)	x	54840
	17921.12883
	Variance		$            17,921.13			Favourable-F
Material Quantity Variance
(	Standard Quantity	-	Actual Quantity	)	x	Standard Rate
(	54810	-	54840	)	x	$                           6.80
	-204
	Variance		$                  204.00			Unfavourable-U
Labor Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Labor Hours
(	$                              28.70	-	$                    29.99	)	x	3530
	-4539
	Variance		$              4,539.00			Unfavourable-U
Labour Efficiency Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	3780	-	3530	)	x	$                        28.70
	7175
	Variance		$              7,175.00			Favourable-F
Variable Overhead Rate Variance
(	Standard Rate	-	Actual Rate	)	x	Actual Labor Hours
(	$                                5.10	-	$                       4.84	)	x	3530
	913
	Variance		$                  913.00			Favourable-F
Variable Overhead Efficiency Variance
(	Standard Hours	-	Actual Hours	)	x	Standard Rate
(	3780	-	3530	)	x	$                           5.10
	1275
	Variance		$              1,275.00			Favourable-F