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# Variances analysis

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ABC Company has developed the following standard costs for its product
Product 1 cost element:Standard Quantity x Standard Price = Unit Standard Cost
Direct Materials 3 pounds x \$2 = \$6
Direct Labor 2 hours x \$8 = \$16
Manufacturing Overhead2 hours x \$4 = \$8
Total = \$30

ABC Company expected to produce 20,000 units of Product 1 this year and work 40,000 direct labor hours. Actual results for the year are: 19,000 units of Product 1 produced. Actual direct labor costs were \$306,000 for 36,000 direct labor hours worked. Actual direct materials purchased and used during the year cost \$112,100 for 59,000 pounds. Actual variable overhead incurred was \$159,000. A) Compute materials price and usage variances. B) Compute the labor price and usage variance. C) Compute the variable overhead spending and efficiency variances.