Problem 24-01A a-b (Video)

Kingbird Corporation manufactures a single product. The standard cost per unit of product is shown below.

Direct materials1 pound plastic at $6.00 per pound		$ 6.00
Direct labor1.5 hours at $12.20 per hour		18.30
Variable manufacturing overhead		9.00
Fixed manufacturing overhead		15.00
Total standard cost per unit		$48.30

The predetermined manufacturing overhead rate is $16.00 per direct labor hour ($24.00 1.5). It was computed from a master manufacturing overhead budget based on normal production of 8,700 direct labor hours (5,800 units) for the month. The master budget showed total variable costs of $52,200 ($6.00 per hour) and total fixed overhead costs of $87,000 ($10.00 per hour). Actual costs for October in producing 4,300 units were as follows.

Direct materials (4,500 pounds)		$ 27,900
Direct labor (6,250 hours)		77,500
Variable overhead		78,430
Fixed overhead		26,670
Total manufacturing costs		$210,500

The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored.

(a) Compute all of the materials and labor variances. Total materials variance Materials price variance Materials quantity variance Total labor variance 0 Labor price variance 0 Labor quantity variance 0 (b) Compute the total overhead variance. Total overhead variance