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Direct Materials Variances

Silicone Engine Inc. produces wrist-worn tablet computers. The company uses Thin Film Crystal (TFC) LCD displays for its products. Each tablet uses one display. The company produced 450 tablets during December. However, due to LCD defects, the company actually used 500 LCD displays during December. Each display has a standard cost of $6.00. LCD displays were purchased for December production at a cost of $3,050.

Determine the price variance, quantity variance, and total direct materials cost variance for December. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. And, enter your final variance amounts to the nearest whole dollar.

Price variance	$fill in the blank 1	FavorableUnfavorableFavorable
Quantity variance	$fill in the blank 3	FavorableUnfavorableUnfavorable
Total direct materials cost variance	$fill in the blank 5	FavorableUnfavorableFavorable

Wiki Wiki Company has determined that the variable overhead rate is $3.40 per direct labor hour in the Fabrication Department. The normal production capacity for the Fabrication Department is 10,000 hours for the month. Fixed costs are budgeted at $76,000 for the month.

	Required:
A.	Prepare a monthly factory overhead flexible budget for 9,000, 10,000, and 11,000 hours of production.
B.	How much overhead would be applied to production if 9,000 hours were used in the department during the month?

. Prepare a monthly factory overhead flexible budget for 9,000, 10,000, and 11,000 hours of production.

Wiki Wiki Company

Monthly Factory Overhead Cost BudgetFabrication Department

1	Direct labor hours	9,000.00	10,000.00	11,000.00
2	Variable factory overhead cost
3	Fixed factory overhead cost
4	Total factory overhead

B. How much overhead would be applied to production if 9,000 hours were used in the department during the month? If required, round your calculations to two decimal places and your final answer to the nearest dollar.

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