Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 49

All Manufacturing Variances Eastern Company manufactures special electrical equipment and parts. The company uses a standard cost system with separate standards established for each product.
The transformer department manufactures a special transformer. This department measures production volume in terms of direct labor hours (DLHs) and uses a flexible-budget system to plan and control departmental overhead costs.
Standard costs for the special transformer are determined annually in September for the coming year. The standard cost of a transformer at its DeCatur plant for the year just completed is $67 per unit, as shown here:
Overhead rates were based on practical capacity of 4,000 DLHs per month. Variable overhead costs are expected to vary with the number of DLHs actually used.
During October, the plant produced 800 transformers. This number was below expectations because a work stoppage occurred during labor contract negotiations. When the contract was settled, the department scheduled overtime in an attempt to reach expected production levels.
The following costs were incurred in October:
Required
1. What is the most appropriate time to record any variance of actual materials prices from standard Explain.
2. What is the total direct labor rate (price) variance for October
3. What is the total direct labor efficiency variance for October
4. What is the total direct materials purchase price variance for October
5. What is the total direct materials usage variance for October
6. What is the variable overhead spending variance for October
7. What is the variable overhead efficiency variance for October
8. What is the budget (spending) variance for fixed overhead for October
9. What is the production-volume variance for October