Problem 23-2A (Part Level Submission) Ayala Corporation accumulates the following data relative to jobs started and finished during the month of June 2017. Costs and Production Data Actual Standard Raw materials unit cost $2.40 $2.20 Raw materials units used 11,000 10,300 Direct labor payroll $162,800 $159,600 Direct labor hours worked 14,800 15,200 Manufacturing overhead incurred $217,464 Manufacturing overhead applied $221,464 Machine hours expected to be used at normal capacity 41,500 Budgeted fixed overhead for June $66,400 Variable overhead rate per machine hour $3.10 Fixed overhead rate per machine hour $1.60 Overhead is applied on the basis of standard machine hours. 3.10 hours of machine time are required for each direct labor hour. The jobs were sold for $478,000. Selling and administrative expenses were $37,900. Assume that the amount of raw materials purchased equaled the amount used. (a) Your answer is correct. Compute all of the variances for (1) direct materials and (2) direct labor. (Round answers to 0 decimal places, e.g. 125.) (1) Total materials variance 37401 Tunfavorable C Materials price variance Materials quantity variance 2 200 Unfavorable 1540 Unfavorable 3200 Tunfavorable 7400 Tunfavorable (2) Total labor variance Labor price variance Labor quantity variance 4200 Favorable Click if you would like to Show Work for this question: Open Show Work SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO TEXT LINK TO TEXT VIDEO: SIMILAR PROBLEM Attempts: 1 of 3 used (b) Your answer is correct. Compute the total overhead variance. Total overhead variance 4000 Favorable Prepare an income statement for management. (Ignore income taxes.) (Round answers to 0 decimal places, e.g. 125.) AYALA CORPORATION Income Statement For the Month Ended June 30, 2017 478000 403724 Sales Revenue Cost of Goods Sold (at standard) Gross Profit (at standard) Variances Materials Price T 74276 T 2200 Unfavorable T Materials Quantity U Labor Price Labor Quantity Overhead 2 Tunfavorable Unfavorable Favorable Favorable 7 400 4200 4000 1 7 1 T Total Variance Unfavorable 3868 Gross Profit (actual) 70408 Selling and Administrative Expenses 37,900 T Net Income / (Loss)