Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials-1 pound plastic at $6.00 per pound $ 6.00 Direct labor-0.5 hours at $11.90 per hour 5.95 Variable manufacturing overhead 3.00 Fixed manufacturing overhead 5.00 Tatal standard cost per unk $19.95 The predetermined manufacturing overhead rate is $16.00 per direct labor hour ($8.00 + 0.5). It was computed from a master manufacturing overhead budget based on normal production of 2,600 direct labor hours (5,200 units) for the month. The master budget showed total variable costs of $15,600 ($6.00 per hour) and total fixed Direct materials (3,190 pounds) $ 19,459 Direct labor (1,390 hours) 17,097 Variable overhead 18,238 Fixed overhead 7,562 Total manufacturing costs $62,356 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 meterials and lebor variances. Tatal materials variance Materials price variance Materials quantity variance

Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials-1 pound plastic at $6.00 per pound $ 6.00 Direct labor-0.5 hours at $11.90 per hour 5.95 Variable manufacturing overhead 3.00 Fixed manufacturing overhead 5.00 Tatal standard cost per unk $19.95 The predetermined manufacturing overhead rate is $16.00 per direct labor hour ($8.00 + 0.5). It was computed from a master manufacturing overhead budget based on normal production of 2,600 direct labor hours (5,200 units) for the month. The master budget showed total variable costs of $15,600 ($6.00 per hour) and total fixed Direct materials (3,190 pounds) $ 19,459 Direct labor (1,390 hours) 17,097 Variable overhead 18,238 Fixed overhead 7,562 Total manufacturing costs $62,356 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 meterials and lebor variances. Tatal materials variance Materials price variance Materials quantity variance

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Management by Exception

A manager’s job is a very tough one. A manager needs to look at the various areas of work and as a manager he has to look after two or more important jobs or activities at the same time for the growth of the business. In order to do all these things in an effective manner, a manager must adopt or practice different management styles and tactics.

Question

A.compute all materials and labor variances

B. Compute total overhead variance

Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below.
Direct materials-1 pound plastic at $6.00 per pound
$ 6.00
Direct labor-0.5 hours at $11.90 per hour
5.95
Variable manufacturing overhead
3.00
Fixed manufacturing overhead
5.00
Tatal standard cost per unit
$19.95
The predetermined manufacturing overhead rate is $16.00 per direct labor hour ($8.00 + 0.5). It was computed from a master manufacturing overhead budget based on
normal production of 2,600 direct labor haurs (5,200 units) for the month. The master budget showed total variable costs of $15,600 ($6.00 per hour) and total fixed
overhead costs of $26,000 ($10.00 per hour). Actual costs for October in producing 3,000 units were as foliows.
Direct materials (3,190 pounds)
$ 19,459
Direct labor (1,390 hours)
17,097
Variable overhead
18,238
Fixed overhead
7,562
Total manufacturing costs
$62,356
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 lebor variances.
Tatal materials variance
Materials price variance
Materials quantity variance

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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Subject: acounting
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