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Costello Corporation manufactures a single product. The standard cost per unit of product is shown below.

Direct materials-2 pound plastic at $7.54 per pound
$ 15.08
Direct labor-2.00 hours at $11.00 per hour
22.00
Variable manufacturing overhead
12.00
Fixed manufacturing overhead
8.00
Total standard cost per unit
$57.08
The predetermined manufacturing overhead rate is $10 per direct labor hour ($20.00 ÷ 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 $70,800 ($6.00 per hour) and total fixed overhead costs of $47,200 ($4.00 per hour). Actual costs for October in producing 4,000 units were as follows.
Direct materials (8,150 pounds)
$ 62,592
Direct labor (7,900 hours)
89,349
Variable overhead
57,438
Fixed overhead
24,382
    Total manufacturing costs
$233,761
The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored.
(a) Compute all of the materials and labor variances. (Round answers to 0 decimal places, e.g. 125.)
Total materials variance
$
Materials price variance
$
Materials quantity variance
$
Total labor variance
$
Labor price variance
$
Labor quantity variance
$
(b) Compute the total overhead variance.
Total overhead variance
$

Accounting Basics, Accounting

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  • Reference No.:- M9799480

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