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7. Xavier Company purchases a single product. Variable manufacturing overhead is applied to products on the basis of direct labor hours. The standard costs for
7. Xavier Company purchases a single product. Variable manufacturing overhead is applied to products on the basis of direct labor hours. The standard costs for one unit of product are as follows Direct material: 6 ounces at 0.50 per ounce Direct labor: 0.6 hours at $30.00 per hour Variable manufacturing overhead: 0.6 hours at $10 per hour $6 S3 $18 Total standard variable cost per unit $27 During June, 2,000 units were produced. The costs associated with June's operations were as follows: Material purchased: 18,000 ounces at $0.60 per ounce $10,800 Material used in production: 14,000 ounces. Direct Labor: 1,100 hours at $30.50 per hour Variable manufacturing overhead costs incurred $33,550 $12,980 Compute the a) direct materials cost variance, b) direct labor cost variance, and c) variable manufacturing overhead cost variances
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