Dante's Protein Powder produces a dietary supplement. The standard cost

Dante's Protein Powder produces a dietary supplement. The standard cost of producing one unit is:

Material (1.25 pounds × $2.50) ..........................$ 3.13

Labor (1.2 hours × $10) .................................. 12.00

Overhead ...................................................11.60

Total ...................................................... $26.73

Standard variable overhead is $8.00 per unit, and fixed annual overhead is $90,000. At the start of 2015, expected production was 25,000 units. During 2015, 30,000 units were produced.

The following information, related to actual costs incurred in 2015, is available:

1. Purchased 40,000 pounds of material for $85,000.

2. Used 38,750 pounds of material.

3. Worked 35,300 labor hours costing $375,000.

4. Actual overhead incurred was $327,000.

Required

a. Show the calculation of the standard overhead rate per unit.

b. Calculate all material, labor, and overhead variances.

c. Prepare a variance summary, and briefly comment on variances that should be investigated.

Members

  • Access to 2 Million+ Textbook solutions
  • Ask any question from 24/7 available
    Tutors
$9.99
VIEW SOLUTION

OR

Non-Members

Get help from Managerial Accounting Tutors
Ask questions directly from Qualified Online Managerial Accounting Tutors .
Best for online homework assistance.