15. Nola Company manufactured and sold 10,000 units last year for $175 per unit, although they...
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15. Nola Company manufactured and sold 10,000 units last year for $175 per unit, although they had budgeted to sell 12,000 units for $180 per unit. Nola purchased and used 20,000 feet of direct materials for $400,000. Nola paid direct labor $300,000 for 15,000 hours. Manufacturing overhead cost $650,000, half variable and half fixed. Variable overhead is usually applied at a rate of 100% of direct labor costs. Fixed overhead was budgeted to cost $400,000. Production standards call for each unit to use 2.5 feet of materials costing $18 per foot, and 2 hours of labor costing $18 per hour. Calculate all nine variances and indicate whether they are favorable or unfavorable. 15. Nola Company manufactured and sold 10,000 units last year for $175 per unit, although they had budgeted to sell 12,000 units for $180 per unit. Nola purchased and used 20,000 feet of direct materials for $400,000. Nola paid direct labor $300,000 for 15,000 hours. Manufacturing overhead cost $650,000, half variable and half fixed. Variable overhead is usually applied at a rate of 100% of direct labor costs. Fixed overhead was budgeted to cost $400,000. Production standards call for each unit to use 2.5 feet of materials costing $18 per foot, and 2 hours of labor costing $18 per hour. Calculate all nine variances and indicate whether they are favorable or unfavorable.
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