Question
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 $
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 labor0.5 hours at $11.10 per hour | 5.55 | |
Variable manufacturing overhead | 2.75 | |
Fixed manufacturing overhead | 5.25 | |
Total standard cost per unit | $21.55 |
The predetermined manufacturing overhead rate is $16.00 per direct labor hour ($8.00 0.5). It was computed from a master manufacturing overhead budget based on normal production of 2,500 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $13,750 ($5.50 per hour) and total fixed overhead costs of $26,250 ($10.50 per hour). Actual costs for October in producing 3,900 units were as follows.
Direct materials (4,060 pounds) | $ 32,886 | |
Direct labor (1,750 hours) | 19,950 | |
Variable overhead | 21,838 | |
Fixed overhead | 11,362 | |
Total manufacturing costs | $86,036 |
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 Neither favorable nor unfavorable/Unfavorable/Favorable | ||
---|---|---|---|---|
Materials price variance | $enter a dollar amount | select an option Neither favorable nor unfavorable/Favorable/Unfavorable | ||
Materials quantity variance | $enter a dollar amount | select an option Neither favorable nor unfavorable/Unfavorable/Favorable | ||
Total labor variance | $enter a dollar amount | select an option Favorable/Neither favorable nor unfavorable/Unfavorable | ||
Labor price variance | $enter a dollar amount | select an option UnfavorableFavorableNeither favorable nor unfavorable | ||
Labor quantity variance | $enter a dollar amount | select an option Unfavorable/Favorable/Neither 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 unfavorable/Unfavorable/Favorable |
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