Problem 11-1A Rogen Corporation manufactures a single product. The standard cost

Question

Problem 11-1A Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials-1 pound plastic at $7 per pound Direct labor-1.6 hours at $12 per hour Variable manufacturing overhcad Fixed manufacturing overhead Total standard cost per unit 19.2 12 $42.2 The predetermined manufacturing overhead rate is?10 per direct labor hour ($16 ÷ 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 ($7.5 per hour) and total fixed overhead costs of $20,000 (S2.5 per hour). Actual costs for October in producing 4,800 units were as follows Direct materials (5,100 pounds) Direct labor (7,400 hours) Variable overhead Fixed overhead s 36,720 92,500 59,700 21,000 $209,920 Total manufacturing costs The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored. Compute all of the materials and labor variances. (Round answers to 0 decimal places, e.g. 125.) Total materials variance Materials price variance Materials quantity varianceg Total labor variance Labor price variance Labor quantity variances

Explanation / Answer

Std material quantity for actual output (4800*1): 4800 Std price: $ 7 Actual qy consumed: 5100 pounds Actual Price per unit: (36720/5100) = $ 7.20 per unit Total material cost variance: Std material Qty*Std price - Actual Qty*Actual price 4800 *7   - 5100*7.20 = $ 3120 Unfavorable Material Price variance: Actual Qty (Std pricce-Actual price) 5100 (7-7.20) = $ 1020 Unfav Material Qty variance: Std price (Std qty-Actual Qty) 7.00 (4800-5100)= 4 2100 unfav Std labour horus for actual output (4800*1.6)= 7680 hours Std rate per hour: $ 12 Actual hours worked: 7400 hours Actual rate per hour (92500/7400) = 12.50 per hour Total Labour cost = Std hours*Std rate -Actual hours*Actual rate 7680 *12 - 7400*12.50 = 340 Unfav Labour rate variance: Actual hours (Std rate-Actual rate) 7400 (12-12.50) = $3700 Unfav Labour efficiency variance: Std rate (Std hours-Actual hours) 12(7680-7400) = 3360 fav

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---