Question

CALCULATOR PRIE Problem 23-2A (Part Level Submission) Ayala Corporation accumulates the following data relative to jobs started and finished during the month of Jun 2017 Costs and Production Data Actual $2.20 11,200 $175,820 14,900 $202,750 Standard $2.00 10,300 $169,830 15,300 Raw materials unit cost Raw materials units used Direct labor payroll Direct labor hours worked Manufacturing overhead incurred Manufacturing overhead applied Machine hours expected to be used at normal capacity Budgeted fixed overhead for June Variable overhead rate per machine hour Fixed overhead rate per machine hour $206,550 43,500 $65,250 $3.00 $1.50 Overhead is applied on the basis of standard machine hours. 3.00 hours of machine time are required for each direct labor hour. The jobs were s and administrative expenses were $35,800. Assume that the amount of raw materials purchased equaled the amount used.

Answer 1

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Solution: Answer is highlighted in yellow: Total overhead variance = (Actual overhead cost) - (Standard overhead Applied) Total overhead variance = $ 3,800 Favorable (202750) - (206550) = $3,800 b)