The standards for one case of Peardrax are:

\begin{array} { | l | l | } \hline \text { Direct materials } & 8 \text { lbs. } \$ \$ 3.50 / \mathrm { Ib } . \\\hline \text { Direct labor } & 4 \text { hrs. } \$ 15.00 / \mathrm { hr } \\\hline \text { Variable overhead (based on machine hours) } & 2 \text { hrs. } \$ \$ 5.00 / \mathrm { hr } . \\\hline\end{array}

During the week ended June 7, the following activity took place:
• 5,740 machine hours were worked;
• 22,600 lbs.of raw material were purchased for inventory at a total cost of $83,620;
• 2,700 cases of finished product were produced;
• 21,330 lbs.of raw material were used;
• 10,650 labor hours were worked at an average rate of $15.20 per hour;
• $27,552 actual variable overhead costs were incurred.
Calculate each of the following variances:
(a.) Price variance for raw materials purchased.
(b.) Raw materials usage variance.
(c.) Direct labor rate variance.
(d.) Direct labor efficiency variance
(e.) Variable overhead spending variance.
(f) Variable overhead efficiency variance

The Part of the Variable Overhead Budget Variance Due to the Difference

Multiple Choice

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