Question: Rondello Corporation manufactures a single product The standard

Rondello Corporation manufactures a single product. The standard cost per unit of product is shown below.
Direct materials—1 pound plastic at $7.00 per pound ...... $ 7.00
Direct labor—1.5 hours at $12.00 per hour ......... 18.00
Variable manufacturing overhead .............. 11.25
Fixed manufacturing overhead ............... 3.75
Total standard cost per unit ............... $40.00
The predetermined manufacturing overhead rate is $10 per direct labor hour ($15.00 ÷ 1.5). It was computed from a master manufacturing overhead budget based on normal production of 7,500 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $56,250 ($7.50 per hour) and total fixed overhead costs of $18,750 ($2.50 per hour). Actual costs for October in producing 4,900 units were as follows.
Direct materials (5,100 pounds) ....... $ 37,230
Direct labor (7,000 hours) ........ 87,500
Variable overhead ........... 56,170
Fixed overhead ............. 19,680
Total manufacturing costs ........ $200,580
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.


View Solution:


Sale on SolutionInn
Sales62
Views1320
Comments
  • CreatedMarch 02, 2012
  • Files Included
Post your question
5000