Managerial Accounting Calculating Variances Homework Help
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Cajun Candy Corporation manufactures giant gourmet suckers. The cost standards developed by Cajun appear below. Manufacturing overhead at Cajun is applied to production on the basis of standard direct labor-hours:
Standard quantity per sucker Standard cost per ounce or hour Standard cost per sucker
Direct materials 0.75 ounces $20.00 $15.00
Direct labor 1.2 hours $12.00 14.40
Variable overhead 1.2 hours $3.00 3.60
Fixed overhead 1.2 hours $5.00 6.00
Total standard cost per sucker $39.00
The standards above were based on an expected annual volume of 8,000 suckers. The actual results for last year were as follows:
Number of suckers produced 8,200
Direct labor-hours incurred 10,000
Ounces of direct materials purchased 7,900
Ounces of direct materials used in production 6,070
Total cost of direct materials purchased $156,815
Total direct labor cost $122,800
Total variable overhead cost $28,600
Compute the following variances for Cajun.
1. Materials price variance.
2. Materials quantity variance.
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3. Labor efficiency.
4. Labor rate variance.
5. Labor spending variance.
6. Variable overhead spending variance.
7. Variable overhead efficiency variance.
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