Hmanufacturing Corporation accumulates the following data relative to jobs started and finished during the month of June 2008.
|
Costs and Production Data
|
Actual
|
Standard
|
| Raw materials unit cost |
$2.25 |
$2.00 |
| Raw materials units used |
10,600 |
10,000 |
| Direct labor payroll |
$122,400 |
$120,000 |
| Direct labor hours worked |
14,400 |
15,000 |
| Manufacturing overhead incurred |
$184,500 |
| Manufacturing overhead applied |
$189,000 |
| Machine hours expected to be used at normal capacity |
42,500 |
| Budgeted fixed overhead for June |
$51,000 |
| Variable overhead rate per hour |
$3.00 |
| Fixed overhead rate per hour |
$1.20 |
Overhead is applied on the basis of standard machine hours. Three hours of machine time are required for each direct labor hour. The jobs were sold for $400,000. Selling and administrative expenses were $40,000. Assume that the amount of raw materials purchased equaled the amount used.
Compute all of the variances for (1) direct materials and (2) direct labor.