Question Details

Gates Company reports the following information 




1.Gates Company reports the following information regarding the production on one of its
products for the month. Compute the direct materials cost variance, the direct materials
price variance, the direct materials quantity variance and identify each as either favorable or

Direct materials standard (6 lbs. @$3/lb.)                                             $18 per finished unit 
Actual direct material used                                                                    179,000 lbs.
Actual finished units produced                                                              30,000 units
Actual cost of direct materials used                                                       $ 554,900
unfavorable.
2.Gates Company reports the following information regarding the production on one of
its products for the month. Compute the direct labor cost variance, the direct labor rate
variance, the direct labor efficiency variance and identify each as either favorable or

Direct labor standard (2 hrs. @$15/hr.)                                             $30 per finished unit 
Actual direct labor hours                                                                      60,800 lbs.
Actual finished units produced                                                            30,000 units
Actual cost of direct labor                                                                    $ 905,920

unfavorable.
3.Gates Company collected the following data regarding production of one of its products. Compute
the variable overhead cost variance, the variable overhead spending variance, the variable overhead
efficiency variance, the fixed overhead cost variance, the fixed overhead spending variance, and the fixed

Direct labor standard (2 hrs. @$15/hr.)                                               $30.00 per finished unit 
Actual direct labor hours                                                                      60,800 hrs.
 Budgeted units                                                                                     31,000 units
Actual finished units produced                                                             30,000 units
Standard variable OH rate (2 hrs. @ $14.00/hr.)                                  $28.00 per finished unit
Standard fixed OH rate($310,000/31,000 units )                                  $10.00 per unit 
Actual cost of variable overhead cost incurred                                     $857,600
Actual cost of fixed overhead costs incurred                                        $312,000

overhead volume variance.




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