Products at the Garretson Company are produced in batches using a standard cost system. Management budgets to
Question:
Products at the Garretson Company are produced in batches using a standard cost system. Management budgets to make 500 of these batches per period. The overhead budget formula is $60,000 fixed costs plus $2.20 per machine hour. The standard costs per batch are as follows:
Direct Material (80 gallons per batch) $ 32 per batch
Direct Labor (60 hours per batch) 816 per batch
Overhead (60 machine hours per batch)
In producing 503 batches during the period, the following costs were incurred:
Direct Material Used (40,743 gallons) $ 15,482.34
Direct Labor (29,677 hours) 405,091.05
Actual Variable Factory Overhead 67,080.00
Actual Fixed Factory Overhead 60,050.00
Do a variance analysis for material, labor, and factory overhead.
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer