Ellison Manufacturing Corporation accumulates the following data relative to jobs started and finished during the month of June 2002

Overhead is applied on the basis of standard machine hours. Three hours of machine time are required for each direct labor hour. The jobs were sold for \($400,000\). Selling and administrative expenses were $40,000

Instructions

(a) Compute all of the variances for direct materials, direct labor, and manufacturing overhead.

(b) Prepare an income statement for management. Ignore income taxes.

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Costs and Production Data Actual Standard Raw materials purchases, 10,500 units $23,100 $21,000 Raw materials units used 10,500 10,000- Direct labor payroll $122,100 $120,000 Direct labor hours worked 14,800 15,000 Manufacturing overhead incurred $182,500 Manufacturing overhead applied $184,500 Machine hours expected to be used at normal capacity Budgeted fixed overhead for June Variable overhead rate per hour 42,500, > $46,750 $3.00