Manlow Company makes a cologne called Allure. The standard cost for one bottle of Allure is as
Question:
Manlow Company makes a cologne called Allure. The standard cost for one bottle of Allure is as follows.
During the month, the following transactions occurred in manufacturing 10,000 bottles of Allure.
1. 58,000 ounces of materials were purchased at $1.00 per ounce.
2. All the materials purchased were used to produce the 10,000 bottles of Allure.
3. 4,900 direct labor hours were worked at a total labor cost of $56,350.
4. Variable manufacturing overhead incurred was $15,000 and fixed overhead incurred was $10,400.
The manufacturing overhead rate of $4.80 is based on a normal capacity of 5,200 direct labor hours. The total budget at this capacity is $10,400 fixed and $14,560 variable.
Instructions
(a) Compute the total variance and the variances for direct materials and direct labor elements.
(b) Compute the total variance for manufacturing overhead.
Step by Step Answer:
Accounting Tools For Business Decision Making
ISBN: 9780470377857
3rd Edition
Authors: Paul D. Kimmel