# Question: Kegler Company has set the following standard costs per unit

Kegler Company has set the following standard costs per unit for the product it manufactures.
Direct materials (15 Ibs. @ \$ 4 per Ib.) . . . . . . . . . . . \$ 60.00
Direct labor (3 hrs. @ \$ 15 per hr.) . . . . . . . . . . . . 45.00
Overhead (3 hrs. @ \$ 3.85 per hr.) . . . . . . . . . . . . . 11.55
Total standard cost . . . . . . . . . . . . . . . . . . . . . . . . . \$ 116.55
The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 10,000 units per month. The following flexible budget information is available.
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During May, the company operated at 90% of capacity and produced 9,000 units, incurring the following actual costs.
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Required
1. Compute the direct materials variance, including its price and quantity variances.
2. Compute the direct labor variance, including its rate and efficiency variances.
3. Compute these variances:
(a) Variable overhead spending and efficiency,
(b) Fixed overhead spending and volume,
(c) Total overhead controllable.
4. Prepare a detailed overhead variance report (as in Exhibit 23.15) that shows the variances for individual items ofoverhead.

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