Inman Corporation manufactures a single product. The standard cost per unit of product is as follows:

The master manufacturing overhead budget for the month based on the normal productive capacity of 20,000 direct labour hours (10,000 units) shows total variable costs of $80,000 ($4 per labour hour) and total fixed costs of $60,000 ($3 per labour hour). Normal production capacity is 20,000 direct hours. Overhead is applied based on direct labour hours. Actual costs for producing 9,800 units in November were as follows

The purchasing department normally 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) Calculate all of the materials and labour variances.
(b) Calculate the total overhead variance.
(c) Calculate the overhead budget variance and the overhead volume variance.

Transcribed Image Text:

Direct materials-2 kg of plastic at $5 per kilogram Direct labour-2 hours at $12 per hour Variable manufacturing overhead Fixed manufacturing overhead Total standard cost per unit $10.00 24.00 8.00 6.00 $48.00 Direct materials (20,500 kg) Direct labour (19,600 hours) Variable overhead Fixed overhead Total manufacturing costs $100,450 239,120 78,100 59,200 $476,870