Cajun Corporation manufactures a labor-intensive product. The cost standards developed by Cajun appear below. Manufacturing overhead at Cajun is applied to production on the basis of standard direct labor-hours: The standards above were based on an expected annual volume of 8,000 units. The actual results for last year were as follows: Required:
Compute the following variances for Cajun.
a. Materials price variance.
b. Materials quantity variance.
c. Labor rate variance.
d. Variable overhead rate variance.
e. Variable overhead efficiency variance.
f. Fixed overhead budget variance.

Question

Cajun Corporation manufactures a labor-intensive product. The cost standards developed by Cajun appear below. Manufacturing overhead at Cajun is applied to production on the basis of standard direct labor-hours:  The standards above were based on an expected annual volume of 8,000 units. The actual results for last year were as follows:  Required:
Compute the following variances for Cajun.
a. Materials price variance.
b. Materials quantity variance.
c. Labor rate variance.
d. Variable overhead rate variance.
e. Variable overhead efficiency variance.
f. Fixed overhead budget variance.

Quizplus · Accepted Answer

The Answer of Cajun Corporation manufactures a labor-intensive product. The cost standards developed by Cajun appear below. Manufacturing overhead at Cajun is applied to production on the basis of standard direct labor-hours:  The standards above were based on an expected annual volume of 8,000 units. The actual results for last year were as follows:  Required:
Compute the following variances for Cajun.
a. Materials price variance.
b. Materials quantity variance.
c. Labor rate variance.
d. Variable overhead rate variance.
e. Variable overhead efficiency variance.
f. Fixed overhead budget variance.

Cajun Corporation Manufactures a Labor-Intensive Product