Question
Anderson Company has the following standard cost card for one unit of a particular product: Direct Materials: 20 kg @ $1.65$ 33 Direct Labour: 2
Anderson Company has the following standard cost card for one unit of a particular product:
Direct Materials: 20 kg @ $1.65$ 33
Direct Labour: 2 hours @ $1530
Total overhead: 2 hours @ $714
$ 77
Fixed overhead was budgeted at $1,920,000 for the year and was based on the production of 40,000 units per month, or 480,000 units per year.
Actual inputs and costs to produce 45,000 units last month are as follows:
Direct materials purchased1,200,000 kg
Cost of direct materials purchased$ 2,040,000
Direct materials used920,000 kg
Direct labour hours worked75,000
Cost of direct labour$ 1,440,000
Variable overhead$ 435,000
Fixed overhead$ 170,000
Cohen Company uses a standard costing system.
Required:
Calculate the following:
a) The direct materials price and quantity variances
c) The variable overhead rate and efficiency variances
d) The fixed overhead budget and volume variances
e) The over- or under-applied overhead for the month
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