Question
Xavier Company produces a single product. Variable manufacturing overhead is applied to products on the basis of direct labor - hours. The standard costs for
Xavier Company produces a single product. Variable manufacturing overhead is applied to products on
the basis of direct labor
-
hours. The standard costs for one unit of product are as follows:
Direct
material: 6 ounces at $0.50 per ounce . . . . . . . . . . . . . . . . . . $3
Direct labor: 1.8 hours at $10 per hour . . . . . . . . . . . . . . . . . . . . . . . 18
Variable manufacturing overhead: 1.8 hours at $5 per hour . . . . . . . 9
Total standard v
ariable cost per unit . . . . . . . . . . . . . . . . . . . . . . . . . $30
During June, 2,000 units were produced. The costs associated with June's operations were as
follows:
Material purchased: 18,000 ounces at $0.60 per ounce . . . . . . . $10,800
Ma
terial used in production: 14,000 ounces . . . . . . . . . . . . . . . . .
Direct labor: 4,000 hours at $9.75 per hour . . . . . . . . . . . . . . . . . $39,000
Variable manufacturing overhead costs incurred . . . . . . . . . . . . . $20,800
Required:
Compute the direct materials, direct labor, and variable manufacturing overhead variances.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started