GG Tire Co. manufactures automobile tires. Standard costs and actual costs for direct materials direct labor and factory overhead incurred for the
manufacture of 20000 tires was as follows: Show All Work!
Standard Costs
Actual Costs
Direct Materials
200000 pounds @ $4.20
220000 pounds @ $4.00
Direct Labor
6000 hours at $18.00
6200 hours at $19.00
Factory Overhead
Rates per direct labor hour
Based on 100% of normal
Capacity of 10000 direct labor
Hours:
Variable Cost $2.80
$16000 variable cost
Fixed Cost $4.00
$40000 fixed cost
Each tire requires 0.30 hour of direct labor.
Required
1. Compute the direct material price and quantity variances
2. Compute the direct labor rate and efficiency variances
3. Compute variable overhead spending and efficiency variances
4. Compute the fixed overhead spending and production volume variances