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The following is from the book of CNN Incorporated for the month of February 2007. A. Production during the month (Boxes of Cereal) 20,000 B.
The following is from the book of CNN Incorporated for the month of February 2007.
A. Production during the month (Boxes of Cereal) | 20,000 |
B. Standard variable costs per box: | |
Direct materials 2 pounds @ $5 per pound | $10 |
Direct labor .20 hour | $2.50 |
Variable factory overhead .20 hour | $1 |
C. Fixed factory overhead cost: | |
Monthly budget for 16,000 boxes or 3,200 hours | $80,000 |
D. Actual production costs: | |
Direct materials purchased 80,000 pounds at $6 | $480,000 |
Direct materials used 44,000 pounds at $6 | $264,000 |
Direct labor 2,400 hours at $11.50 | $27,600 |
Factory overhead (50% variable / 50% fixed) | $120,000 |
Compute the following with the corresponding solutions: A. Materials Variance B. Labor Variance C. Overhead Variance D. Total Manufacturing Variance
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