Kudos Co: Materials, labor, and overhead variances; overhead variance report Kudos Company has set the following standard costs per unit for the product it manufactures. Direct materials ( 10 Ibs. @ $ 3 per Ib.). . . . . . . . . . . $ 30.00 Direct labor ( 4 hrs. @ $ 6 per hr.) . . . . . . . . . . . . . 24.00 Overhead ( 4 hrs. @ $ 2.50 per hr.) . . . . . . . . . . . . . 10.00 Total standard cost . . . . . . . . . . . . . . . . . . . . . . . . . $ 64.00 The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 10,000 units per month. The following flexible budget information is available. ----------------------------------------------------Operating Levels ----------------------------------------------------70% 80% 90% Production in units . . . . . . . . . . . . . . . . . . 7,000 8,000 9,000 Standard direct labor hours . . . . . . . . . . . 28,000 32,000 36,000 Budgeted overhead Variable overhead costs Indirect materials . . . . . . . . . . . . . . . . $ 8,750 $ 10,000 $ 11,250 Indirect labor . . . . . . . . . . . . . . . . . . . 14,000 16,000 18,000 Power . . . . . . . . . . . . . . . . . . . . . . . . . 3,500 4,000 4,500 Maintenance . . . . . . . . . . . . . . . . . . . . 1,750 2,000 2,250 Total variable costs . . . . . . . . . . . . . . 28,000 32,000 36,000 Fixed overhead costs Rent of factory building . . . . . . . . . . 12,000 12,000 12,000 Depreciation - machinery . . . . . . . . 20,000 20,000 20,000 Supervisory salaries . . . . . . . . . . . . . 16,000 16,000 16,000 Total fixed costs . . . . . . . . . . . . . . . . . 48,000 48,000 48,000 Total overhead costs . . . . . . . . . . . . $ 76,000 $ 80,000 $ 84,000 During May, the company operated at 90% of capacity and produced 9,000 units, incurring the following actual costs. Direct materials ( 92,000 Ibs. @ $ 2.95 per Ib.) . . . . . . . . ..................... $ 271,400 Direct labor ( 37,600 hrs. @ $ 6.05 per hr.) . . . . . . ................................. .227,480 Overhead costs Indirect materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,000 Indirect labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,000 Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500 Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000 Rent of factory building . . . . . . . . . . . . . . . . . . . . . . . . . 12,000 Depreciation - machinery . . . . . . . . . . . . . . . . . . . . . . . 19,200 Supervisory salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,000............. 81,700 Total costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......................... $ 580,580 Required 1. Compute the direct materials variance, including its price and quantity variances. 2. Compute the direct labor variance, including its rate and efficiency variances. 3. Compute these variances: (a) variable overhead spending and efficiency, (b) fixed overhead spending and volume, and (c) total overhead controllable. 4. Prepare a detailed overhead variance report that shows the variances for individual items of overhead