Photo Corporation Makes a Product with the Following Standard Costs

Essay

Photo Corporation makes a product with the following standard costs:
$$\begin{array} { | l | c | c | } \hline \text { Imputs } & \begin{array} { c } \text { Stancard Quantity } \\\text { or Hours }\end{array} & \begin{array} { c } \text { Standard Price } \\\text { or Rate }\end{array} \\\hline \text { Direct materials } & 7.8 \text { kilos } & \$ 1.00 \text { per kilo } \\\hline \text { Direct labor } & 0.4 \text { hours } & \$ 18.00 \text { per hour } \\\hline \text { Variable overhead } & 0.4 \text { hours } & \$ 3.00 \text { per hour } \\\hline\end{array}$$ The company reported the following results concerning this product in August.
$\begin{array}{|l|r|}\hline \text { Actual output } & 8,500 \text { units } \\\hline \text { Raw materials used in production } & 65,560 \text { kilos } \\\hline \text { Purchases of raw materials } & 69,000 \text { kilos } \\\hline \text { Actual direct labor-hours } & 3,410 \text { hours } \\\hline \text { Actual cost of raw materials purchases } & \$ 75,900 \\\hline \text { Actual direct labor cost } & \$ 66,495 \\\hline \text { Actual variable overhead cost } & \$ 9,889 \\\hline\end{array}$
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.