(AlCPA) Analyzing overhead variances Armando makes a product with the following standard costs: Direct materials (20 yds....

(AlCPA) Analyzing overhead variances Armando makes a product with the following standard costs:

Transcribed Image Text:

Direct materials (20 yds. @ $1.35 per yd.) Direct labor (4 hours @ $9 per hour)... Factory overhead (applied at the rate of 5/6 of direct labor cost. The ratio of variable to fixed overhead costs is 2 to 1.) ... Total standard cost per unit of output. $27 36 30 $93 Standards are based on normal monthly production of 600 units or 2,400 direct labor hours. During the month of July the following occurred: Direct materials purchased (18,000 yards @ $1.38) Direct materials used (9,500 yards) Direct labor (2,100 hours @ $9.15 per hour). Actual factory overhead. Units produced during July $24,840 19,215 16,650 500 REQUIRED a. Prepare the following schedules computing: 1. Variable factory overhead rate per direct labor hour. 2. Total monthly fixed factory overhead based on normal capacity. b. Prepare the following schedules for the month of July: 1. Controllable factory overhead variance. 2. Factory overhead volume variance.