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Manatee Corp. has developed standard costs based on a predicted operating level of 352,000 units of production, which is 80% of capacity. Variable overhead is
Manatee Corp. has developed standard costs based on a predicted operating level of 352,000 units of production, which is 80% of capacity. Variable overhead is $281,600 at this level of activity, or $0.80 per unit. Fixed overhead is $440,000. The standard costs per unit are: Direet materials (0.3 lbs.S1/b.0.50 per unit Direot labor (I hourS6 hour)6.00 per unit Overhead (rS2.05 hour) $2.05 per unit Manatee actually produced 330,000 units at 75% of capacity and actual costs for the period were: Direct materials (162,000 lbs.) Direct labor (329,500 hours$2,042,900 Fixed overhead Variable overhead$ 262,000 170,100 S 438,000 Calculate the following variances and indicate whether each variance is favorable or unfavorable: (1) Direct labor efficiency variance: (2) Direct materials price variance (3) Controllable overhead variance: EXTRA CREDIT
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