15-47    Two-Variance Analysis and Direct Labor Variance Marilyn, Inc., uses a standard cost system and analyzes overhead using a two-variance analysis. The following information relates to its operations in April:

 

 

 

Actual total cost for direct labor	$86,800
Total direct labor hours worked	14,000
Total standard labor hours for the output in April	15,000
Direct labor rate variance—unfavorable	$2,800
Actual total overhead cost	$32,000
Budgeted fixed overhead cost	$9,000
Practical capacity, in hours	12,000
Total overhead application rate per standard direct labor hour	$2.25

 

 

 

Note: For the analysis of the total overhead variance, set up a model similar to the one presented in Exhibit 15.17.

 

 

 

 

 

 

 

 

 

Required

 

1.    What was Marilyn’s direct labor efficiency variance for April?

 

2.    What was Marilyn’s factory overhead flexible-budget variance for April?

 

3.    What was Marilyn’s production-volume variance for April?

 

4.    What is the relationship between the direct labor efficiency variance and the variable overhead effi- ciency variance?