Question 2: Input price and input efficiencyvariances

The budgeted and actual data for direct materials and labor are asfollows:

	Budgeted	Actual
DM price	$1 per pound	$0.75 per pound
DM quantity per unit	5 pounds per unit	6 pounds per unit
DL price	$8 per hour	$11 per hour
DL quantity per unit	0.3 hours per unit	0.4 hours per unit

Actual sales volume is 100 units. Budgeted sales volume is 80units.

a) Without computations, characterize the followingvariances as favorable or unfavorable:
input price variance for DM F U

input efficiency variance for DM F U

input price variance for DL F U

input efficiency variance for DL F U


b) Compute the input price and input efficiency variancesfor DM and DL.
As a preliminary step, compute actual input quantity (total poundsor hours we actually used) and flexible budget input quantity(total pounds or hours we should have used for actualoutput):
    actual input quantity for DM=  pounds
    flexible budget input quantity for DM=  pounds
    actual input quantity for DL=  hours
    flexible budget input quantity for DL=  hours
Next, compute the variances. Enter favorable variances as apositive number and unfavorable variances as a negative number. DoNOT enter F or U.
    input price variance for DM = $
    input efficiency variance for DM = $
    input price variance for DL = $
    input efficiency variance for DL = $