Question :

Arrow Enterprises uses a normal costing system. The standard cost sheet for product no. 549 follows.

Direct materials: 4 units @ $6.50 $26.00

Direct labor: 8 hours @ $8.50 68

Variable factory overhead: 8 hours @ $7.00 56

Fixed factory overhead: 8 hours @ 2.5   20

Net standard cost per unit $170.00

The subsequent information pertains to activity for December:

1. Direct materials acquired in the current month amounted to 26,350 units at $6.40 per unit. Every material was consumed in operations.

2. Arrow incurred an average wage rate of $8.75 for 51,400 hours of activity.

3. Net overhead incurred amounted to $508,400. Budgeted fixed overhead totals $1.8 million and is spread evenly throughout the year.

4. Actual production amounted to 6,500 completed units.

Instructions:

a. Evaluate Arrow's direct material variances.

b. Calculate Arrow's direct labor variances.

c. calculate Arrow's variances for factory overhead.