Direct materials-1 pound plastic at $7 per pound Direct labor-2.0 hours at $12.50 per hour Variable manufacturing overhead Fixed manufacturing overhead Total standard cost per unit Direct materials (4,980 pounds) Direct labor (9.410 hours) Variable overhead Fixed overhead Tabela $35,856 The predetermined manufacturing overhead rate is $16 per direct labor hour ($32.00 +2.0). 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 overhead costs of $66,000 ($5.50 per hour) and total foxed overhead costs of $126,000 ($10.50 per hour). Actual costs for October in producing 4,800 units were as follows. 119.507 107,520 48,280 $7,00 25.00 653 165 11.00 21.00 $64.00
Direct materials-1 pound plastic at $7 per pound Direct labor-2.0 hours at $12.50 per hour Variable manufacturing overhead Fixed manufacturing overhead Total standard cost per unit Direct materials (4,980 pounds) Direct labor (9.410 hours) Variable overhead Fixed overhead Tabela $35,856 The predetermined manufacturing overhead rate is $16 per direct labor hour ($32.00 +2.0). 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 overhead costs of $66,000 ($5.50 per hour) and total foxed overhead costs of $126,000 ($10.50 per hour). Actual costs for October in producing 4,800 units were as follows. 119.507 107,520 48,280 $7,00 25.00 653 165 11.00 21.00 $64.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Direct materials-1 pound plastic at $7 per pound
Direct labor-2.0 hours at $12.50 per hour
res a single product. The standard cost per unit of product is shown below.
Variable manufacturing overhead
Fixed manufacturing overhead
Total standard cost per unit
Direct materials (4,980 pounds)
Direct labor (9.410 hours)
Variable overhead
Fixed overhead
Total manufacturing costs
The predetermined manufacturing overhead rate is $16 per direct labor hour ($32.00 +2.0). 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 overhead costs of $66,000 ($5.50 per hour) and total fixed overhead costs of $126,000 ($10.50 per
hour). Actual costs for October in producing 4,800 units were as follows.
$35,856
119.507
107,520
$7.00
25,00
11.00
48,280
$311.163
21.00
$64.00
Transcribed Image Text:Direct materials (4,980 pounds)
Direct labor (9.410 hours)
Variable overhead i
Fixed overhead
Total manufacturing costs
$ 35,856
119,507
Overhead volume variance
107,520
$311,163
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.
Compute the overhead controllable variance and the overhead volume variance.
Overhead controllable variance $
48,280
$
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