Question: Water Movers Inc is known throughout the world for its

Water Movers, Inc. is known throughout the world for its H2O-X high-capacity water pump, used in irrigation systems. The pump’s standard cost is as follows. The company’s predetermined fixed overhead rate is based on an expected capacity of 100,000 direct labor hours per month.

During the month of September, the company produced 22,000 of the 25,000 pumps that had been scheduled for production in the budget. The company used 382,000 pounds of material during September. The direct labor payroll for the month was $940,000 for 94,000 direct labor hours. Variable overhead costs were $740,000; fixed overhead costs were $540,000. The company’s purchasing agent signed a new supply contract that resulted in purchases of 500,000 pounds of direct materials at a total price of $2,750,000.

Calculate Water Movers’ direct materials, direct labor, and overhead variances forSeptember.
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  • CreatedFebruary 21, 2014
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