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Zee Corporation has developed the following cost standards for the production of its leather backpacks:...

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Accounting

Zee Corporation has developed the following cost standards for the production of its leather backpacks:

Standard Cost Per Backpack
Leather (2.2 yards $23 per yard) $50.60
Direct labor (2.5 hours $8.00 per hour) $20.00
Variable overhead (2.5 hours $14.40 per hour) $36.00

Variable overhead at Zee is applied on the basis of direct labor hours. The actual results for last month were as follows:

Number of backpacks produced 13,500
Direct labor hours incurred 32,910
Yards of leather purchased 31,420
Yards of leather used in production 30,840
Cost of leather purchased $667,675
Direct labor cost $217,206
Variable overhead cost $487,068

The direct materials purchases variance is computed when the materials are purchased. Required: Compute the following variances for Zee.

a. Materials price variance.

b. Materials quantity variance.

c. Labor efficiency variance.

d. Variable overhead rate variance.

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