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Required information The Litton Company has established standards as follows: Direct Material Direct Labour Variable Manufacturing Overhead 3 kgs. @$4/kg. $12 per unit 2

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Required information The Litton Company has established standards as follows: Direct Material Direct Labour Variable Manufacturing Overhead 3 kgs. @$4/kg. $12 per unit 2 hrs. @ $8/hr. $16 per unit 2 hrs. @ $5/hr. = $10 per unit Actual production figures for the past year are given below. The company records the materials price variance when materials are purchased. Units Produced Direct Material Used Direct Material Purcahsed (3,000 kgs.) Direct Labour Cost (1,100 hrs.) Variable Manufacturing Overhead Cost Incurred 600 2,000 kgs. $11,400 $9,240 $5,720 The company applies variable manufacturing overhead to products on the basis of direct labour hours.

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