Final answer:
a. The materials price variance for September is -$2,158. b. The materials quantity variance for September is -$7,334. c. The labor rate variance for September is $0. d. The labor efficiency variance for September is $0. e. The variable overhead rate variance for September is $0. f. The variable overhead efficiency variance for September is $0.
Step-by-step explanation:
a. To compute the materials price variance, we need to compare the actual price paid for raw materials to the standard price. The actual quantity of raw materials purchased was 107,900 liters and the actual cost of raw materials purchased was $979,500. Therefore, the materials price variance can be calculated as follows:
Materials price variance = (Standard price - Actual price) x Actual quantity
= ($8.90 - $9.10) x 107,900
= $-2,158
Therefore, the materials price variance for September is -$2,158.
b. To compute the materials quantity variance, we need to compare the actual quantity of raw materials used in production to the standard quantity. The actual quantity of raw materials used in production was 106,980 liters. Therefore, the materials quantity variance can be calculated as follows:
Materials quantity variance = (Standard quantity - Actual quantity) x Standard price
= (9.30 - 10.00) x 106,980
= $-7,334
Therefore, the materials quantity variance for September is -$7,334.
c. To compute the labor rate variance, we need to compare the actual labor rate to the standard rate. The actual labor rate was $25.70 per hour and the actual direct labor hours were 7,750. Therefore, the labor rate variance can be calculated as follows:
Labor rate variance = (Standard rate - Actual rate) x Actual hours
= ($25.70 - $25.70) x 7,750
= $0
Therefore, the labor rate variance for September is $0.
d. To compute the labor efficiency variance, we need to compare the actual direct labor hours to the standard hours. The actual direct labor hours were 7,750. Therefore, the labor efficiency variance can be calculated as follows:
Labor efficiency variance = (Standard hours - Actual hours) x Standard rate
= (0.70 - 0.70) x 7,750
= $0
Therefore, the labor efficiency variance for September is $0.
e. To compute the variable overhead rate variance, we need to compare the actual variable overhead rate to the standard rate. The actual variable overhead rate was $7.80 per hour and the actual direct labor hours were 7,750. Therefore, the variable overhead rate variance can be calculated as follows:
Variable overhead rate variance = (Standard rate - Actual rate) x Actual hours
= ($7.80 - $7.80) x 7,750
= $0
Therefore, the variable overhead rate variance for September is $0.
f. To compute the variable overhead efficiency variance, we need to compare the actual direct labor hours to the standard hours. The actual direct labor hours were 7,750. Therefore, the variable overhead efficiency variance can be calculated as follows:
Variable overhead efficiency variance = (Standard hours - Actual hours) x Standard rate
= (0.70 - 0.70) x 7,750
= $0
Therefore, the variable overhead efficiency variance for September is $0.