Question

[The following information applies to the questions displayed below.] A manufactured product has the following information for June. Standard (6 lbs. @ $8 per lb.) (2 hrs. @ $16 per hr.) |(2 hrs. @ $12 per hr.) Actual 48,500 lbs. @ $8.10 per lb 15,700 hrs. @ $16.50 per hr. $198,000 8,000 Direct materials Direct labor Overhead Units manufactured (1) Compute the standard cost per unit. Direct materials Direct labor Overhead Total $ 0 (2) Compute the total cost variance for June. Indicate whether the cost variance is favorable or unfavorable. Total cost variance

Answer 1

Standard cost per unit for direct materials = 6 x 8

= $48

Standard cost per unit for direct labor = 2 x 16

= $32

Standard cost per unit for overhead = 2 x 12

= $24

Direct materials	48
Direct labor	32
Overhead	24
Total	$104

2.

	Standard Cost	Actual Cost	Variance
Direct materials	8,000 x 48 = 384,000	485,000 x 8.1 = 392,850	8,850 unfavorable
Direct labor	8,000 x 32 = 256,000	15,700 x 16.5 = 259,050	3,050 unfavorable
Overhead	8,000 x 24 = 192,000	198,000	6,000 unfavorable
Total	$832,000	$849,900	$17,900 ( Unfavorable)

Total cost variance

$17,900

unfavorable

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