costello corporation manufactures asingle product. The standard cost per unit of product is shownbelow:
Direct materials - 2 pound plastic at $7.71 perpound - $15.42
Direct labor - 2.00 hours at $11.00 per hour - $22.00
Variable Manufacturing overhead - $12.00
Fixed Manufacturing overhead - $16.00
Total standard cost per unit - $65.42
The predetermined manufacturing overhead rate of $14 per directlabor hour ($28.00 / 2.00). It was computed from a mastermanufacturing overhead budget based on normal production of 10,200direct labor hours (5,100 units for the month). The master budgetshowed total variable costs of $61,200 ($6.00 per hour) and totalfixed overhead costs of $81,600 ($8.00 per hour). Actual costs forOctober in producing 4,200 units were as follows:
Direct materials (8,570 pounds) - $67,189
Direct labor (8,270 hours) - $93,368
Variable overhead - $89,609
Fixed overhead - $30,021
Total manufacturing costs - $280,187
The purchasing department buys the quantities of raw materialsthat are expected to be used in production each month. Rawmaterials inventories, therefore, can be ignored.
A. Compute all of the materials and labor variances andfavorable/unfavorable/neither
Total materials variances
Materials price variances
Materials quantity variances
Total labor variance
Labor price variance
Labor quantity variance
B. Compute the total overhead variance.
costello corporation manufactures asingle product. The standard cost per unit of product is shownbelow:
Direct materials - 2 pound plastic at $7.71 perpound - $15.42
Direct labor - 2.00 hours at $11.00 per hour - $22.00
Variable Manufacturing overhead - $12.00
Fixed Manufacturing overhead - $16.00
Total standard cost per unit - $65.42
The predetermined manufacturing overhead rate of $14 per directlabor hour ($28.00 / 2.00). It was computed from a mastermanufacturing overhead budget based on normal production of 10,200direct labor hours (5,100 units for the month). The master budgetshowed total variable costs of $61,200 ($6.00 per hour) and totalfixed overhead costs of $81,600 ($8.00 per hour). Actual costs forOctober in producing 4,200 units were as follows:
Direct materials (8,570 pounds) - $67,189
Direct labor (8,270 hours) - $93,368
Variable overhead - $89,609
Fixed overhead - $30,021
Total manufacturing costs - $280,187
The purchasing department buys the quantities of raw materialsthat are expected to be used in production each month. Rawmaterials inventories, therefore, can be ignored.
A. Compute all of the materials and labor variances andfavorable/unfavorable/neither
Total materials variances
Materials price variances
Materials quantity variances
Total labor variance
Labor price variance
Labor quantity variance
B. Compute the total overhead variance.
Related questions
Costello Corporation manufactures a single product. The standardcost per unit of product is shown below.
Direct materialsâ2 pound plastic at $6.89 per pound | $ 13.78 | |
Direct laborâ2.00 hours at $11.00 per hour | 22.00 | |
Variable manufacturing overhead | 14.00 | |
Fixed manufacturing overhead | 10.00 | |
Total standard cost per unit | $59.78 |
The predetermined manufacturing overhead rate is $12 per directlabor hour ($24.00 ÷ 2.00). It was computed from a mastermanufacturing overhead budget based on normal production of 11,800direct labor hours (5,900 units) for the month. The master budgetshowed total variable costs of $82,600 ($7.00 per hour) and totalfixed overhead costs of $59,000 ($5.00 per hour). Actual costs forOctober in producing 3,500 units were as follows.
Direct materials (7,180 pounds) | $ 50,475 | |
Direct labor (6,860 hours) | 77,381 | |
Variable overhead | 61,738 | |
Fixed overhead | 24,472 | |
Total manufacturing costs | $214,066 |
The purchasing department buys the quantities of raw materials thatare expected to be used in production each month. Raw materialsinventories, therefore, can be ignored.
(a) Compute all of the materials and laborvariances. (Round answers to 0 decimal places, e.g.125.)
Total materials variance | $ | UnfavorableFavorableNeither favorable nor unfavorable | ||
Materials price variance | $ | Neither favorable nor unfavorableFavorableUnfavorable | ||
Materials quantity variance | $ | FavorableUnfavorableNeither favorable nor unfavorable | ||
Total labor variance | $ | UnfavorableFavorableNeither favorable nor unfavorable | ||
Labor price variance | $ | UnfavorableNeither favorable nor unfavorableFavorable | ||
Labor quantity variance | $ | FavorableUnfavorableNeither favorable nor unfavorable |
(b) Compute the total overhead variance.
Total overhead variance | $ | FavorableNeither favorable nor unfavorableUnfavorable |
Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below.
| Direct materialsâ1 pound plastic at $6 per pound | $ 6.00 | |
| Direct laborâ2.00 hours at $11.15 per hour | 22.30 | |
| Variable manufacturing overhead | 14.00 | |
| Fixed manufacturing overhead | 18.00 | |
| Total standard cost per unit | $60.30 |
The predetermined manufacturing overhead rate is $16 per direct labor hour ($32.00 ÷ 2.00). It was computed from a master manufacturing overhead budget based on normal production of 12,000 direct labor hours (6,000 units) for the month. The master budget showed total variable costs of $84,000 ($7.00 per hour) and total fixed overhead costs of $108,000 ($9.00 per hour). Actual costs for October in producing 4,100 units were as follows.
| Direct materials (4,250 pounds) | $ 26,350 | |
| Direct labor (8,070 hours) | 92,402 | |
| Variable overhead | 99,710 | |
| Fixed overhead | 33,590 | |
| Total manufacturing costs | $252,052 |
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.)
(b)
Compute the total overhead variance.
The following standard costs were developed for one of theJackson Martinez company's products:
Standard Cost Card Per Unit
| Materials: 10 pounds x $8 per pound | $80.00 |
| Direct Labor: 3 hours x $32 per hour | 96.00 |
| Variable manufacturing overhead: $20 per hour | ? |
| Fixed Manufacturing overhead: $X per hour | ? |
| Total standard costs per unit | ? |
The following information is available regarding the company;soperations for the period.
Units produced: 15,000
Materials purchased and used 153,000 pounds @ $7.50 perpound
Direct Labor: 47,000 hours @ $34 per hour
Manufacturing overhead incurred:
Variable: $912,000
Fixed: 2,560,000
Budgeted fixed manufacturing overhead for the period is$2,700,000 and expected capacity for the period is 45,000 directlabor hours.
Required:
a) Calculate the standard fixed manufacturing overhead rate
b) complete the standard cost card per unit for the product
c) calculate the direct material price and quantityvariances
d) calculate the direct labor rate and efficiency variances
e) calculate the variable overhead rate and efficiencyvariances
f) calculate the fixed overhead spendin variance
