Songsu Co. is struggling to control costs. We are hired as consultants to determine why the companys actual costs exceed budgeted costs. The Tableau Dashboard is provided for our analysis.

Direct Materials:

Standard: 4 lbs, $6

Actual: 6 lbs, $7

Direct Labor:

Standard: 2 hours per unit, $17 per hour

Actual: 2.5 hours per unit, $14 per hour

1. Compute the standard cost per unit. 2. Compute the total cost variance. Indicate whether this cost variance is favorable, unfavorable or no variance.

Compute the standard cost per unit.

Direct materials
Direct labor
Overhead
Total

Compute the total cost variance. Indicate whether this cost variance is favorable, unfavorable or no variance.

Total cost variance:

Overhead Standard Costs Overhead Actual Costs $20 $15 Price Per Hour $10 Fixed Overhead $5 $0 8 hrs $169,000 6 hrs Variable Overhead Hours Per Unit 4 hrs 2 hrs O hrs Fixed Overhead Variable Overhead Actual Units Manufactured