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Variance Performance Analysis Cryolab Inc makes and sells a lawn fertilizer called Hypergro....

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Accounting

Variance Performance Analysis

Cryolab Inc makes and sells a lawn fertilizer called Hypergro. The company has developed standard costs for one bag of Hypergro as follows:

Standard Quantity/Hours Standard Price/Rate Standard Cost per Bag
Direct Material 25 pounds 0.75 18.75
Direct Labor 0.25 hours 69.00 17.30
Variable overhead 0.25 hours 24.00 6.00
Total 42.05

The company had no beginning inventories of any kind on January 1. Variable overhead is applied to production on the basis of standard direct labor hours. During January, the following activity was recorded by the company:

  • Production of Fastgro: 23,000 bags

  • Direct materials purchased: 585,000 pounds at a cost of 436,250

  • Direct labor worked: 5,800 hours at a cost of 397,300

  • Variable overhead incurred: 140,650

  • Inventory of direct materials on January 31: 8,000 pounds

Compute the variances and indicate whether it is FAVORABLE (F) or UNFAVORABLE (U) in your solution sheet.

The variable manufacturing overhead rate variance amounts to _____________.

Indicate in your solution sheet whether it is FAVORABLE or UNFAVORABLE

For uniformity of answers, if the variance is FAVORABLE encode a minus sign before the numerical answer. Do not place spaces.

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