# Question: Bowser Products operates a small plant in New Mexico that

Bowser Products operates a small plant in New Mexico that produces dog food in batches of 1,200 pounds. The product sells for \$4 per pound. Standard costs for 2012 are:
Standard direct labor cost = \$16 per hour
Standard direct labor hours per batch = 9 hours
Standard price of material A = \$0.25 per pound
Standard pounds of material A per batch = 900 pounds
Standard price of material B = \$0.45 per pound
Standard pounds of material B per batch = 300 pounds
Fixed overhead cost per batch = \$500
At the start of 2012, the company estimated monthly production and sales of 50 batches.
The company estimated that all overhead costs were fixed and amounted to \$25,000 per month. During the month of June 2012 (typically a somewhat slow month), 40 batches were produced (not an unusual level of production for June).The following costs were incurred:
Direct labor costs were \$6,800 for 400 hours.
36,500 pounds of material A costing \$7,300 were purchased and used.
12,000 pounds of material B costing \$5,520 were purchased and used.
Fixed overhead of \$24,400 was incurred.

Required
a. Calculate variances for material, labor, and overhead.
b. Prepare a summary of the variances. Does the unfavorable overhead volume variance suggest that overhead costs are out of control?

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