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Zee Corporation Has Developed the Following Cost Standards for the Production

Question 266

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Zee Corporation has developed the following cost standards for the production of its leather backpacks: Zee Corporation has developed the following cost standards for the production of its leather backpacks: Variable overhead at Zee is applied on the basis of direct labor hours. The actual results for last month were as follows: The direct materials purchases variance is computed when the materials are purchased. Required: Compute the following variances for Zee. a. Materials price variance. b. Materials quantity variance. c. Labor efficiency variance. d. Variable overhead rate variance. Variable overhead at Zee is applied on the basis of direct labor hours. The actual results for last month were as follows: Zee Corporation has developed the following cost standards for the production of its leather backpacks: Variable overhead at Zee is applied on the basis of direct labor hours. The actual results for last month were as follows: The direct materials purchases variance is computed when the materials are purchased. Required: Compute the following variances for Zee. a. Materials price variance. b. Materials quantity variance. c. Labor efficiency variance. d. Variable overhead rate variance. The direct materials purchases variance is computed when the materials are purchased.
Required:
Compute the following variances for Zee.
a. Materials price variance.
b. Materials quantity variance.
c. Labor efficiency variance.
d. Variable overhead rate variance.

Correct Answer:

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a. Materials price variance = AQ × (AP -...

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