In all problems involving variances, use “F” and “U” to indicate favorable and unfavorab...

In all problems involving variances, use “F” and “U” to indicate favorable and unfavorable variances, respectively.

(Appendix) Materials, labor, and overhead variances–fourvariance method

NYC Corp. uses a standard cost system and manufactures one product. The variable costs per product follow:

Budgeted fixed costs for the month are $4,000, and NYC expected to manufacture 2,000 units. Actual production, however, was only 1,800 units. Materials prices were 10% over standard, and labor rates were 5% over standard. Of the factory overhead expense, only 80% was used, and fixed overhead was $100 over budget. The actual variable overhead cost was $4,800. In materials usage, 8% more parts were used than were allowed for actual production by the standard, and 6% more labor hours were used than were allowed.

Required:

1. Calculate the materials and labor variances.

2. Calculate the variances for overhead by the four-variance method.