On May 1, Maximus Company began the manufacture of a new mechanical device known as Caesar. The company installed a standard cost system in accounting for manufacturing costs. The standard costs for a unit of Caesar follow:

Raw materials (5 lb@$1 per lb) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5

Direct labor (1 hr@$8 per hr) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Overhead (50% of direct labor costs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

.............................. $17

The following data came from Maximus's records for the month of May:

Units

Actual production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000

Units sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500

The amount shown above for the materials price variance is applicable to raw materials purchased during May.
Required:
Compute each of the following items for Maximus for the month of May. Show computations in good form.
1. Standard quantity of raw materials allowed (in pounds) for actual production.
2. Actual quantity of raw materials used (in pounds).
3. Standard direct labor hours allowed.
4. Actual direct labor hours worked.
5. Actual direct labor rate.
6. Actual totaloverhead.

Transcribed Image Text:

Debit Credit $50,000 Sales. Purchases (22,000 pounds) Materials price variance...1300 Materials quantity variance Direct labor rate variance .. 770 Direct labor efficiency variance Manufacturing overhead total variance . $23,300 1,000 1,200 .500