Using the information in P25-1A, compute the overhead controllable variance and the overhead volume variance. P25-1A Rogen
Question:
Using the information in P25-1A, compute the overhead controllable variance and the overhead volume variance.
P25-1A
Rogen 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—1.6 hours at $12.00 per hour..........................................19.20
Variable manufacturing overhead............................................................12.00
Fixed manufacturing overhead....................................................................4.00
Total standard cost per unit.....................................................................$42.20
The predetermined manufacturing overhead rate is $10 per direct labor hour ($16.00 ÷ 1.6). It was computed from a master manufacturing overhead budget based on normal production of 8,000 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $60,000 ($7.50 per hour) and total fixed overhead costs of $20,000 ($2.50 per hour). Actual costs for October in producing 4,800 units were as follows.
Direct materials (5,100 pounds)................................................$ 36,720
Direct labor (7,400 hours)...............................................................92,500
Variable overhead..............................................................................59,700
Fixed overhead....................................................................................21,000
Total manufacturing costs........................................................$209,920
CorporationA Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Accounting Principles
ISBN: 978-1118875056
12th edition
Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso