The Des Moines Leather Company makes a variety of leather goods. It uses standard costs and a…

The Des Moines Leather Company makes a variety of leather goods. It uses standard costs and a flexible budget to aid planning and control. Budgeted variable overhead at a 45,000-directlabour-hour level is €81,000.
During April, the company had a favourable variable-overhead efficiency variance of €2,970. Material purchases were €241,900. Actual direct-labour costs incurred were €422,100. The direct-labour quantity variance was €15,300 unfavourable. The actual average wage rate was €.60 lower than the standard average wage rate. The company uses a variable-overhead rate of 20 per cent of standard direct-labour cost for flexible-budgeting purposes. Actual variable overhead for the month was €92,250. Compute the following amounts; use U or F to indicate whether variances are unfavourable or favourable.

1 Standard direct-labour cost per hour.

2 Actual direct-labour hours worked.

3 Total direct-labour price variance.

4 Total flexible budget for direct-labour costs.

5 Total direct-labour flexible-budget variance.

6 Variable-overhead spending variance in total.

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