Problem 11-1A Rogen Corporation manufactures a single product. The standard cost
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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 $6 per pound Direct labor-2.50 hours at $12.05 per hour Variable manufacturing overhead Fixed manufacturing overhead Total standard cost per unit 6.00 30.13 18.75 21.25 $76.13 The predetermined manufacturing overhead rate is $16 per direct labor hour ($40.00 ÷ 2.50). It was computed from a master manufacturing overhead budget based on normal production of 12,750 direct labor hours (5,100 units) for the month. The master budget showed total variable costs of $95,625 ($7.50 per hour) and total fixed overhead costs of $108,375 ($8.50 per hour) Actual costs for October in producing 3,600 units were as follows Direct materials (3,760 pounds) Direct labor (8,870 hours) Variable overhead Fixed overhead $22,936 108,658 103,678 42,422 $277,694 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 ignoredExplanation / Answer
Actual units produced units in Oct 3,600 Budgeted for 3600 unit Actual Variance Analysis Total Qty Qty/unit total Amt Rate /unit Total Qty Qty/unit total Amt Rate /unit Direct Material 3,760 1.044 22,936 6.100 3,600 1 21,600 6 Direct Labor 8,870 2.46 108,658 12.25 9,000 2.50 108,450 12.05 Variable OH 103,678 28.80 9,000 67,500 18.75 Fixed OH 42,422 11.78 9,000 76,500 21.25 Details F/U a Total Matreial Variance = Actual material cost - std material cost for actual production =22936-21600 1,336 U Matreials Price variance= Actual material used(actual rate-std rate)=3760*0.044 376 U Material Qty Variance=Std rate(Actual Qt-Std Qty)= 6*160 960 U Total Labor Variance= Actual labor cost - Std labor cost for actual output= 108658-108450 208 U Labor Price Variance= Actual labor Hrs(Actual labor rate-std rate) =8870*0.20 1,774 U Labor Qty Variance=Std labor rate(Actual labor Hrs-Std labor Hrs) =12.05*130 1,567 F B Details Actual Budgeted for Actual output Variable Overhead 103,678 67,500 Fixed Ovehead 42,422 76,500 Total Overhead 146,100 144,000 Total Overhead Variance 2,100 U