Question
Waterway Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials-1 pound plastic at $7.00 per pound
Waterway Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials-1 pound plastic at $7.00 per pound $7.00 Direct labor-2.00 hours at $11.50 per hour 23.00 Variable manufacturing overhead Fixed manufacturing overhead 11.00 13.00 Total standard cost per unit $54.00 The predetermined manufacturing overhead rate is $12 per direct labor hour ($24.00 +2.00). It was computed from a master manufacturing overhead budget based on normal production of 11,800 direct labor hours (5,900 units) for the month. The master budget showed total variable costs of $64,900 ($5.50 per hour) and total fixed overhead costs of $76,700 ($6.50 per hour). Actual costs for October in producing 4.100 units were as follows. Direct materials (4,200 pounds) $29.820 Direct labor (8,030 hours) 95,557 Variable overhead 68,878 Fixed overhead 31,522 Total manufacturing costs $225,777
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