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The Litton Company has established standards as follows: Direct material Direct Labor Variable manufacturing overhead 3 pounds per unit @ 4 per pound= 12 per
The Litton Company has established standards as follows: Direct material Direct Labor Variable manufacturing overhead 3 pounds per unit @ 4 per pound= 12 per unit 2 hours per unit @ 8 per hour= 16 per unit 2 hours per unit @ 5 per hour= 10 per unit Actual production figures for the past year are given below. The company records the materials pric variance when materials are purchased. Units produced Direct materials used 600 units 2,000 pounds Direct materials purchased (3,000 pounds) 11,400 Direct Labor cost (1,100 hours) 9,240 Variable manufacturing overhead cost incurred 5,720 The company applies variable manufacturing overhead to products on the basis of standard direct labor-hours. The materials price variance is: 400u 400f 600f 600u 0000
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