When preparing budgets, Pine, Inc.'s formula for wages and salaries costs was $8,000 of fixed costs and $1.00 per unit of variable costs. Pine planned to produce 9,500 units but actually produced 9,800 units. Actual wages and salaries costs were $17,300. Pine's spending variance for wages and salaries is:
$200 Favorable
$200 Unfavorable
$500 Unfavorable
$500 Favorable
QUESTION 17
Oak Company's standard cost card for the product it manufactures is presented below:
Standard quantity (or Standard Price (or Standard Cost
hours)
rate)
Direct Material
2.5 pounds per unit
$ 3.00 per pound
$ 7.50 per unit
Direct Labor
0.5 hours per unit
$20.00 per hour
$10.00 per unit
Manufacturing Overhead
0.5 hours per unit
$6.00 per hour
$ 3.00 per unit
During the current period, Oak purchased 21,000 pounds of material for $58,000. All of the material was used to produce 9,000 units of product. Oak's materials spending variance is:
$9,500 Favorable
$4,500 Unfavorable
$5,000 Favorable
$4,500 Favorable
