Wausau Furniture Company uses a standard cost system in accounting for its production costs. The standard cost of a unit of furniture follows:

The following flexible monthly overhead budget applies:

Direct Labor Hours Estimated Overhead

5,200.....................$21,600

4,800.......................20,400

4,400.......................19,200

4,000 (normal capacity) ..............18,000

3,600.......................16,800

The actual unit costs for the month of December follow:

Required:
Compute the variances for materials, labor, and factory overhead, using the three-variance method for overheadcosts.

Transcribed Image Text:

Lumber used (110 ft a $120 per 1,000 ft) Directlabor (4 1/4 hr S1024 per hr) Factory overhead: S13.20 43.52 Variable costs $7,400 13,720 $21,120÷1,200 units Fixed costs 17.60 Total actual unit cost.. S74.32