[moonkhan209]

Materials, labor, and overhead variances; and overhead variance report
Kegler Company has set the following standard costs per unit for the product it manufactures.





Direct materials (17 Ibs. @ $4 per Ib.)

$
68

Direct labor (4 hrs. @ $18 per hr.)


72

Overhead (4 hrs. @ $3.85 per hr.)


15.4

Total standard cost

$
155.4


The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 10,000 units per month. The following flexible budget information is available.

Operating Levels

70%
80%
90%
Production in units
7,000



8,000



9,000

Standard direct labor hours


28,000



32,000



36,000

Budgeted overhead












Variable overhead costs












Indirect materials

$
14,000


$
16,000


$
18,000

Indirect labor


20,300
23,200
26,100

Power
5,950
6,800
7,650

Maintenance


28,700



32,800



36,900

Total variable costs


68,950



78,800



88,650

Fixed overhead costs












Rent of factory building


15,000



15,000



15,000

Depreciation—Machinery


10,000



10,000



10,000

Supervisory salaries


19,400



19,400



19,400

Total fixed costs


44,400



44,400



44,400

Total overhead costs

$
113,350


$
123,200


$
133,050


During May, the company operated at 90% of capacity and produced 9,000 units, incurring the following actual costs.









Direct materials (140,000 Ibs. @ $3.8 per Ib.)





$
532,000

Direct labor (30,000 hrs. @ $16 per hr.)






480,000

Overhead costs








Indirect materials

$
16,000





Indirect labor


27,500





Power


7,650





Maintenance


3,800





Rent of factory building


15,000





Depreciation—Machinery


10,000





Supervisory salaries


24,000
103,950

Total costs
$
1,115,950
In this question, I have to Compute the direct materials variance, including its price and quantity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e. zero variance). Omit the "$" sign in your response.)
Price variance. The Price Variance is 28000 which I got by Multiplying 140000 by the difference of Acual cost and Standard cost. Now I can't find the Quantity Varience. I know that the standard price would be 4, but don't know what would be standard quantity so my answer about Quantity Varience should be equal to 52000. Would be very thankful, if anybody help to figureout this problem.
$
28,000 (2%)
F (2%)
Quantity variance
$
52,000 (2%)
F (2%)
Direct materials variance
$
80,000