Finley Manufacturing Corporation accumulates the following data for jobs started and finished during the month of June 2022: 

Overhead is applied based on standard machine hours. Three hours of machine time are required for each direct labour hour. The jobs were sold for $400,000. Selling and administrative expenses were $40,000. Assume that the amount of raw materials purchased equalled the amount used. 

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.

d. Prepare an income statement for management. Ignore income taxes.

Transcribed Image Text:

Cost and Production Data Raw materials unit cost Raw materials units used Direct labour payroll Direct labour hours worked Manufacturing overhead incurred Manufacturing overhead applied Machine hours expected to be used at normal capacity Budgeted fixed overhead for June Variable overhead rate per hour Fixed overhead rate per hour Actual $ 2.25 10,600 $122,400 14,400 $184,500 Standard $ 2.00 10,000 $120,000 15,000 $189,000 42,500 $ 51,000 $ 3.00 $ 1.20