Kropf Incorporated has provided the following data concerning one of the products in its standard cost system. Variable manufacturing overhead is applied to products on the basis of direct labor-hours.
The company has reported the following actual results for the product for September:
Required:a. Compute the materials price variance for September.b. Compute the materials quantity variance for September.c. Compute the labor rate variance for September.d. Compute the labor efficiency variance for September.e. Compute the variable overhead rate variance for September.f. Compute the variable overhead efficiency variance for September.

a.Materials price variance = (Actual quantity × Actual price) − (Actual quantity × Standard price)= $562,500 − (75,000 liters × $7.00 per liter)= $562,500 − $525,000= $37,500 Unfavorableb.Standard quantity = 9,600 units × 7.4 liters per unit = 71,040 litersMaterials quantity variance = (Actual quantity × Standard price) − (Standard quantity × Standard price)= (Actual quantity − Standard quantity) × Standard price= (71,050 liters − 71,040 liters) × $7.00 per liter= 10 liters × $7.00 per liter= $70 Unfavorablec.Labor rate variance = (Actual hours × Actual rate) − (Actual hours × Standard rate)= $142,302 − (6,410 hours × $21.70 per hour)= $142,302 − $139,097= $3,205 Unfavorabled.Standard hours = 9,600 units × 0.70 hours per unit = 6,720 hoursLabor efficiency variance = (Actual hours × Standard rate) - (Standard hours × Standard rate)= (Actual hours − Standard hours) × Standard rate= (6,410 hours − 6,720 hours) × $21.70 per hour= (−310 hours) × $21.70 per hour= $6,727 Favorablee.Variable overhead rate variance = (Actual hours × Actual rate) − (Actual hours × Standard rate)= $34,614 − (6,410 hours × $5.90 per hour)= $34,614 − ($37,819)= $3,205 Favorablef.Standard hours = 9,600 units × 0.70 hours per unit = 6,720 hoursVariable overhead efficiency variance = (Actual hours × Standard rate) − (Standard hours × Standard rate)= (Actual hours − Standard hours) × Standard rate= (6,410 hours − 6,720 hours) × $5.90 per hour= (−310 hours) × $5.90 per hour = $1,829 Favorable