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Chillco Corporation produces containers of frozen food. During April, Chillco produced 760 cases of food and incurred the following actual costs. Variable overhead $ 6,400
Chillco Corporation produces containers of frozen food. During April, Chillco produced 760 cases of food and incurred the following actual costs.
Variable overhead | $ | 6,400 | |
Fixed overhead | 21,300 | ||
Actual labor cost (5,000 direct-labor hours) | 87,500 | ||
Actual material cost (20,000 pounds purchased and used) | 66,000 | ||
Overhead is budgeted and applied using direct-labor hours in a standard costing system. Standard cost and annual budget information are as follows:
Standard Costs per Case | |||
Direct labor (6 hours at $17 per hour) | $ | 102.00 | |
Direct material (25 pounds at $2.90 per pound) | 72.50 | ||
Variable overhead (6 direct-labor hours at $1.60 per hour) | 9.60 | ||
Fixed overhead (6 direct-labor hours at $4 per hour) | 24.00 | ||
Total | $ | 208.10 | |
Annual Budget Information | |||
Variable overhead | $ | 96,000 | |
Fixed overhead | $ | 240,000 | |
Planned activity for year | 60,000 | direct-labor hours | |
compute the following cost variances from the available data.
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