Problem 24-01A

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

Direct materials1 pound plastic at $8.00 per pound		$ 8.00
Direct labor1.5 hours at $11.70 per hour		17.55
Variable manufacturing overhead		9.75
Fixed manufacturing overhead		5.25
Total standard cost per unit		$40.55

The predetermined manufacturing overhead rate is $10.00 per direct labor hour ($15.00 1.5). It was computed from a master manufacturing overhead budget based on normal production of 8,100 direct labor hours (5,400 units) for the month. The master budget showed total variable costs of $52,650 ($6.50 per hour) and total fixed overhead costs of $28,350 ($3.50 per hour). Actual costs for October in producing 3,200 units were as follows.

Direct materials (3,380 pounds)		$ 27,378
Direct labor (4,700 hours)		55,930
Variable overhead		35,518
Fixed overhead		14,382
Total manufacturing costs		$133,208

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		$enter a dollar amount		select an option UnfavorableFavorableNeither favorable nor unfavorable
Materials price variance		$enter a dollar amount		select an option FavorableNeither favorable nor unfavorableUnfavorable
Materials quantity variance		$enter a dollar amount		select an option Neither favorable nor unfavorableUnfavorableFavorable
Total labor variance		$enter a dollar amount		select an option FavorableNeither favorable nor unfavorableUnfavorable
Labor price variance		$enter a dollar amount		select an option Neither favorable nor unfavorableFavorableUnfavorable
Labor quantity variance		$enter a dollar amount		select an option UnfavorableFavorableNeither favorable nor unfavorable

(b) Compute the total overhead variance.

Total overhead variance

$enter the total overhead variance in dollars

select an option Neither favorable nor unfavorableFavorableUnfavorable