Photo Corporation Makes a Product with the Following Standard Costs

Essay

Photo Corporation makes a product with the following standard costs:
$\begin{array}{lcc}\text { Inputs } & \text { Standard Quantity or Hours } & \text { Standard Price or Rate }\\\text { Direct materials } & 7.8 \text { kilos } & \$ 1.00 \text { per kilo } \\\text { Direct labor } & 0.4 \text { hours } & \$ 18.00 \text { per hour } \\\text { Variable overhead } & 0.4 \text { hours } & \$ 3.00 \text { per hour }\end{array}$


The company reported the following results concerning this product in August.
$\begin{array}{lr}\text { Actual output } & 8,500 \text { units } \\\text { Raw materials used in production } & 65,550 \text { kilos } \\\text { Purchases of raw materials } & 69,000 \text { kilos } \\\text { Actual direct labor-hours } & 3,410 \text { hours } \\\text { Actual cost of raw materials purchases } & \$ 75,900 \\\text { Actual direct labor cost } & \$ 66,495 \\\text { Actual variable overhead cost } & \$ 9,889\end{array}$

The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.
Required:
a. Compute the materials quantity variance.
b. Compute the materials price variance.
c. Compute the labor efficiency variance.
d. Compute the direct labor rate variance.
e. Compute the variable overhead efficiency variance.
f. Compute the variable overhead rate variance.