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Alpha Omega Industry uses standard-cost system and had the following standards for a unit of product: Quantity per unit 3.7 meter Cost per unit
Alpha Omega Industry uses standard-cost system and had the following standards for a unit of product: Quantity per unit 3.7 meter Cost per unit $18.50 $ 6.75 0.90 hour Variable manufacturing overhead 0.90 hour $ 2.25 Fixed manufacturing overhead 0.90 hour $ 2.70 The denominator activity for developing the budgeted manufacturing overhead is on the basis of direct labor hours for total budgeted units of 8,200. For the month just ended, the company produced 8,000 units and incurred the following: a. Purchased direct materials at $4.80 per meter at a total cost of $153,600 on account. b. Direct materials was issued to production, there was neither beginning nor ending direct materials inventory for the month. Direct material..... Direct labor.. Cost per quantity $5.00 per meter $7.50 per hour $2.50 per hour $3.00 per hour c. Direct labor incurred and paid at $8 per hour at a total cost of $51,200 d. Variable manufacturing overhead incurred totaled $17,600. e. Fixed manufacturing overhead incurred totaled $22,000. Question: 1. Compute the amount as direct materials price variance and state whether it is favorable or unfavorable. 2. Compute the amount as direct materials usage variance and state whether it is favorable or unfavorable. 3. Compute the amount as direct labor rate variance and state whether it is favorable or unfavorable. 4. Compute the amount as direct labor efficiency variance and state whether it is favorable or unfavorable. 5. Compute the amount as variable manufacturing overhead spending variance and state whether it is favorable or unfavorable. 6. Compute the amount as variable manufacturing overhead efficiency variance and state whether it is favorable or unfavorable. Variance balance 100000 Choose Favorable or Unfavorable
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