Problem 25-7A

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

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Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials-1 pound plastic at $7.00 per pound 7.00 Direct labor-1.6 hours at $12.00 per hour 19.20 Variable manufacturing overhead 12.00 Fixed manufacturing overhead 4.00 Total standard cost per unit $42.20 The predetermined manufacturing overhead rate is $10 per direct labor hour ($16.00 1.6). It was computed from a master manufacturing overhead budget based on normal production of 8,000 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $60,000 ($7.50 per hour) and total fixed overhead costs of $20,000 ($2.50 per hour). Actual costs for October in producing 4,800 units were as follows. 36,720 Direct materials (5,100 pounds) 92,500 Direct labor (7,400 hours) 59,700 Variable overhead Fixed overhead 21,000 $209,920 Total manufacturing costs 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 Compute the overhead controllable variance and the overhead volume variance. Overhead controllable variance Overhead volume variance