Question

Problem 16-59 Manufacturing Variances (LO 16-5) Delta Products prepares its budgets on the basis of standard costs. A responsibility report is prepared monthly showing the differences between master budget and actual results. Variances are analyzed and reported separately. There are no materials inventories. The following information relates to the current period Standard costs (per unit of output) Direct materials, 7 gallonsS4.00 per gallon Direct labor, 5.00 hours@$30.00 per hour $ 28 150 45 $223 Factory overhead Variable (30% of direct labor cost) Total standard cost per unit Actual costs and activities for the month follow Materials used Output Actual labor costs Actual variable overhead 15,820 gallons at $1.94 per gallon 2,100 units 6,100 hours at $41.40 per hour S73,390 Required Prepare a cost variance analysis for the variable costs. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) Direct materials: Price variance Efficiency variance Direct materials cost variance 32,58g F $ 4,480 $ 28,109 Direct labor Price variance Efficiency variance Direct labor cost variance $ 69,540 132,000 $-62,460 Variable overhead: Price variance Efficiency variance Variable overhead cost variance 21,110

**I have found the correct answers for everything but price variance and efficiency variance. Please show work. Thank you

Answer 1

Variable overhead price variance = (Standard price-actual price)actual quantity

= (9*6100-73390)

Variable overhead price variance = 18490 U

Variable overhead efficiency variance = (Standard quantity-actual quantity)standard price

= (2100*5-6100)*9

Variable overhead efficiency variance = 39600 F