Answered: Rogen Corporation manufactures a single…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 2PB: Five Card Draw manufactures and sells 10,000 units of Aces, which retails for $200, and 8,000 units...

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Question

Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below.

Direct materials—1 pound plastic at $8.00 per pound		$ 8.00
Direct labor—1.5 hours at $11.90 per hour		17.85
Variable manufacturing overhead		9.75
Fixed manufacturing overhead		11.25
Total standard cost per unit		$46.85

The predetermined manufacturing overhead rate is $14.00 per direct labor hour ($21.00 ÷ 1.5). It was computed from a master manufacturing overhead budget based on normal production of 8,250 direct labor hours (5,500 units) for the month. The master budget showed total variable costs of $53,625 ($6.50 per hour) and total fixed overhead costs of $61,875 ($7.50 per hour). Actual costs for October in producing 4,200 units were as follows.

Direct materials (4,380 pounds)		$ 35,478
Direct labor (6,190 hours)		75,518
Variable overhead		67,030
Fixed overhead		23,170
Total manufacturing costs		$201,196

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.

Total materials variance	$enter a dollar amount	select an option
Materials price variance	$enter a dollar amount	select an option
Materials quantity variance	$enter a dollar amount	select an option
Total labor variance	$enter a dollar amount	select an option
Labor price variance	$enter a dollar amount	select an option
Labor quantity variance	$enter a dollar amount	select an option

(b)

Compute the total overhead variance.

Total overhead variance

$enter the total overhead variance in dollars

select an option

Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below.

Direct materials—1 pound plastic at $8.00 per pound		$ 8.00
Direct labor—1.5 hours at $11.90 per hour		17.85
Variable manufacturing overhead		9.75
Fixed manufacturing overhead		11.25
Total standard cost per unit		$46.85

Direct materials (4,380 pounds)		$ 35,478
Direct labor (6,190 hours)		75,518
Variable overhead		67,030
Fixed overhead		23,170
Total manufacturing costs		$201,196

Total materials variance	$enter a dollar amount	select an option
Materials price variance	$enter a dollar amount	select an option
Materials quantity variance	$enter a dollar amount	select an option
Total labor variance	$enter a dollar amount	select an option
Labor price variance	$enter a dollar amount	select an option
Labor quantity variance	$enter a dollar amount	select an option

(b)

Compute the total overhead variance.

Total overhead variance

$enter the total overhead variance in dollars

select an option

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