Purchase Solution

# Mayol Company Variances

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Mayol Company produces widgets with following standard costs per unit:

DM (3 lb @ 70/lb)---- \$2.10
DL (2 hrs @ \$3.50/hrs)---\$7.00
Variable OH (2 hrs @ \$.50/hr)---1.00
Fixed OH (2 hours @ \$2.50/hr)---5.00

Normal monthly production is 7,100 units. During August, the company manufactured 6,950 units.
25,000 lbs of DM were purchased for \$17,500, and 22,500 lbs of DM issued into production.
DL costs incurred \$ 47,950, and 14,000 DL hours used.
Actual factory OH was \$7,500 for Variable OH and \$36,000 for fixed OH.

Compute DM, DL and OH (4-WAY).

##### Solution Summary

Calculates i). Direct-material Qty variance, ii). Direct-material price variance, iii) Direct-labor efficiency variance, iv) Direct-labor rate variance, v) Variable Overhead efficiency variance, vi) Variable Overhead expenditure variance, vii) Fixed overhead expenditure variance, viii) Fixed overhead volume (capacity) variance, ix) Fixed overhead efficiency variance

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