Barker Production Company has developed the following standards for one of its products.

STANDARD VARIABLE COST CARD  
One Unit of Product  
   
Materials: 30 square feet ´ $5 per square foot $150.00
Direct labor: 16 hours ´ $7 per hour 112.00
Variable manufacturing overhead: 16 hours ´ $5 per hour   80.00
Total standard variable cost per unit $342.00

The company records materials price variances at the time of purchase. The following activity occurred during the month of April:

Materials purchased: 80,000 sq. feet at $5.30 per sq. foot
Materials used: 74,000 square feet
Units produced: 2,500 units
Direct labor: 42,000 hours at $6.70 per hour
   
Actual variable manufacturing overhead: $228,000

Required:

a. Calculate the direct materials price variance.
b. Calculate the direct materials usage variance.
c. Calculate the direct labor rate variance.
d. Calculate the direct labor efficiency variance.
e. Calculate the variable overhead spending variance.
f. Calculate the variable overhead efficiency variance.

ANS: 

a. $24,000 U 80,000 ´ ($5.30 – $5.00)
b. $5,000 F $5 ´ (74,000 – 75,000)
c. $12,600 F 42,000 ´ ($6.70 – $7.00)
d. $14,000 U $7 ´ (42,000 – 40,000)
e. $18,000 U $228,000 – (42,000 ´ $5)
f. $10,000 U $5 ´ (42,000 – 40,000)

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