Question

Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials-1 pound plastic at $7 per pound Direct labor-1.50 hours at $11.10 per hour Variable manufacturing overhead Fixed manufacturing overhead Total standard cost per unit $7.00 16.65 11.25 6.75 $41.65 The predetermined manufacturing overhead rate is $12 per direct labor hour ($18.00 - 1.50). It was computed from a master manufacturing overhead budget based on normal production of 8,850 direct labor hours (5,900 units) for the month. The master budget showed total variable costs of $66,375 ($7.50 per hour) and total fixed overhead costs of $39,825 ($4.50 per hour). Actual costs for October in producing 4,700 units were as follows. Direct materials (4,890 pounds) Direct labor (6,900 hours) Variable overhead Fixed overhead Total manufacturing costs $35,208 78,660 62,602 24,098 $200,568 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.) Total materials variance स Materials price variance स Materials quantity variance $ Total labor variance स स Labor price variance स Labor quantity variance

Answer 1

Actual Actual Standard Quantity Standard Price/Rate Quantity Actual Quantity*Standard Price/Rate Price/Rate 35,208 34230 (4890*7) 78,66076590 (6900*11.10) 32900 (4700* 7) 78255 (4700* 16.65) Ditrect Labours Direct Labour a) 1. Material Variences Formula Varience Total Material Variences AQ*AP-SQ*SP 35208-32900 $ 2308 U Material Price Variences AQ*AP-AQ*SP |35208-34230 = $978 U Material Quantity AQ SP - SQ*SP 34230-32900 $ 1330 U Variences 2.Labour Variences Varience Formula AH AR-SH SR$405 U |(78660-78255) Total Labour Variences AH AR-AH SR $ 2070 U Labour Price Varience (78660-76590) Labour Quantity (76590-78255) AH SR-SH SR$ 1665 F Variences Total Overhead Varience b) Actual overhead Costs Budgeted Overhead Costs $ Total Overhead Varience 86,700 (62602+24098) 92,700 (39825+(11.25*4700)) 6000 F