LOVATO CORPORATION produces a product for which it sells for $70. The following standard cost record is available: Direct materials 3 lbs. @ $5/lb. Direct labor 4 hrs. @ $15/hr. Overhead Information: Production information: Budgeted $500,000 Budgeted direct-labor hours 100,000 hrs. Actual 480,000 Actual direct-labor hours 120,000 hrs.

A. Compute the predetermined overhead rate per hr. $______________

B. How much overhead is applied to each unit? $____________ per unit

C. Compute the standard unit cost $__________

D. Assume that the company has $20,000 in beginning work in process and $16,000 in ending work in process for the period. Total production costs for the period were $65,000. Cost of goods manufactured was: $______________

E. Assume that Cost of Goods Manufactured for the period was $155,000.

The company had $115,000 of product in finished-goods inventory at the start of the period, and $110,000 in finished-goods inventory at the end of the period.

Cost of goods sold is: $_______________

use T acct

F. NOW ASSUME that 10,000 units were sold. Use your cost of goods sold from #9. Compute the amount of gross margin $_____________

G. Actual production was 40,000 units, requiring 120,000 direct labor hours. Compute the direct labor efficiency variance $ (indicate amount and direction)

H. How many standard lbs. of materials are allowed for the actual level of production? _____________ lbs.