When using a standard costing system, the balances in all inventory and cost of goods sold accounts will be at standard amounts at the end of the accounting period. Variances for direct materials, direct labor, and manufacturing overhead have been recorded throughout the period.
Required:
For each of the following variances, identify how it is calculated, at what point the variance is recorded, and the interpretation of an unfavorable variance.
| 1. | Direct material price variance |
| 2. | Direct material quantity variance |
| 3. | Direct labor rate variance |
| 4. | Direct labor efficiency variance |
| 5. | Variable overhead spending variance |
| 6. | Variable overhead efficiency variance |
| 7. | Fixed overhead spending variance |
| 8. | Fixed overhead volume variance |