Concept explainers
Rogen Corporation manufactures a single product. The
Direct materials—1 pound plastic at $7.00 per pound | $ 7.00 |
Direct labor— 1.6 hours at $12.00 per hour | 19.20 |
Variable manufacturing |
12.00 |
Fixed manufacturing overhead | 4.00 |
Total standard cost per unit | $42.20 |
The predetermined manufacturing overhead rate is $10 per direct labor hour ($16.00 + 1.6). It was computed from a master manufacturing overhead budget based on normal production of 8,000 direct labor hours (5,000 units) for the month. The
Direct materials (5,100 pounds) | $ 36,720 |
Direct labor (7,400 hours) | 92,500 |
Variable overhead | 59,700 |
Fixed overhead | 21,000 |
Total |
$209,920 |
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.
Instructions
(a) Compute all of the materials and labor variances.
(b) Compute the total overhead variance.
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