Question

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

Direct materials—2 pound plastic at $6.89 per pound		$ 13.78
Direct labor—2.00 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