Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: Direct materials: 6 pounds at $8 per pound $ 48 per unit Direct labor: 3 hours at $14 per hour 42 per unit Variable overhead: 3 hours at $5 per hour 15 per unit Total standard cost per unit $ 105 total ________________________________________ The planning budget for December was based on producing and selling 19,000 units. However, during December the company actually produced and sold 24,000 units and incurred the following costs: a. Purchased 160,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production. b. Direct laborers worked 60,000 hours at a rate of $15 per hour. c. Total variable manufacturing overhead for the month was $336,600. Questions: 1. What raw materials cost would be included in the companys planning budget for December? 2. What direct labor cost would be included in the companys flexible budget for December? 3. What is the variable overhead rate variance for December? 4. If the Company had purchased 175,000 pounds of materials at $7.20 per pound and used 160,000 pounds in production, what would be the materials price variance for December? 5. What is the labor rate variance for December?

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