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.
Excel file contains calculations of materials price and usage variances, the labor price and usage variance , e the variable overhead spending and efficiency variances.