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Answer sheet:

*Problem 23-1A (part level submission) Costello Corporation manufactures a single product. The standard cost per unit of product is shown below Direct materials-2 pound plastic at $6.50 per pound Direct labor-1.50 hours at $11.00 per hour Variable manufacturing overhead Fixed manufacturing overhead Total standard cost per unit 13.00 16.50 9.00 6.00 $44.50 The predetermined manufacturing overhead rate is $10 per direct labor hour ($15.00 1.50). 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 $48,600 ($6.00 per hour) and total fixed overhead costs of $32,400 ($4.00 per hour). Actual costs for October in producing 3,400 units were as followss Direct materials (6,950 pounds) Direct labor (4,900 hours) Variable overhead Fixed overhead $ 46,704 55,370 38,350 14,690 $155,114 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