Aluma Corporation manufactures metal screen doors for commercial buildings. The standard costs per screen door follow:
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Direct Materials:
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Aluminum
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4 sheets at $2
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$ 8
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Copper
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3 sheets at $4
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12
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Direct labor
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7 hours at $8
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56
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Variable overhead
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5 machine hours at $3
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15
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Fixed overhead
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5 machine hours at $2
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10
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Overhead rates were based on normal monthly capacity of 6,000 machine
hours. During November, 850 doors were produced. This was below normal levels due to the effects of a labor strike that occurred during union contract negotiations. Once the dispute was settled, the company scheduled overtime to try to catch up to regular production levels. The following costs were incurred in November:
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Material:
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Aluminum:
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4,000 sheets purchased at $2; used 3,500 sheets
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Copper:
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3,000 sheets purchased at $4.20; used 2,600 sheets
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Direct Labor:
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Regular time:
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5,200 hours at $8.00 (precontract settlement)
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|
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Regular time:
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900 hours at $8.50 (postcontract settlement)
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Variable Overhead:
$11,700 (based on 4,175 machine hours)
Fixed Overhead: $9,300 (based on 4,175 machine hours) Determine the following:
a. Total material price variance
b. Total material usage (quantity) variance
c. Labor rate variance
d. Labor efficiency variance
e. Variable overhead spending variance
f. Variable overhead efficiency variance
g. Fixed overhead spending variance
h. Volume variance
i. Budget variance