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XYZ uses 1.5 pounds of wood to make baseball bats. The price of wood is $7.00 per pound. 2 direct labor hours are required to
XYZ uses 1.5 pounds of wood to make baseball bats. The price of wood is $7.00 per pound. 2 direct labor hours are required to make a baseball bat and the direct labor rate is $11.00 per hour. Variable overhead is assigned based on direct labor hours at a rate of $1.50 per direct labor hour. Baseball bats selling price is $55.00. Fixed overhead (selling and administrative expenses) is budgeted to be $400,000. At the end of year XYZ sold 30,000 units with sales ascending to $1,675,000. Materials used were 46,000 pounds and the materials cost were $7.05 per pound. Direct Labor hours used to produce 30,000 units was 59,800 hours and the rate paid was $10.95 per hour. Variable Overhead was $94,000 and fixed overhead (selling and administrative expenses) was 407,000 for a total overhead incurred of $501,000. REQUIRED: Compute Total Variable Cost Varlance Multiple Choice 0 $4,110 UNFAVORABLE $169,390 UNFAVORABLE $16,890 UNFAVORABLE O 84,110 FAVORABLE $8,110 UNFAVORABLE REQUIRED: Compute Pre-tax Income varlance Multiple Choice $9,890 FAVORABLE $16,890 FAVORABLE $16,890 UNFAVORABLE $9,300 UNFAVORABLE none of the above REQUIRED: Compute Direct Material Price Varlance Multiple Choice $9,300 FAVORABLE O $9,300 UNFAVORABLE O $2,300 UNFAVORABLE $7,000 UNFAVORABLE none of the above
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