Problem 11-8A Ayala Corporation accumulates the following data relative to jobs

Question

Problem 11-8A

Ayala Corporation accumulates the following data relative to jobs started and finished during the month of June 2014.

Costs and Production Data

Actual

Standard

Overhead is applied on the basis of standard machine hours. 3.00 hours of machine time are required for each direct labor hour. The jobs were sold for $453,000. Selling and administrative expenses were $35,300. Assume that the amount of raw materials purchased equaled the amount used.

Compute the overhead controllable variance and the overhead volume variance.

Costs and Production Data

Actual

Standard

Raw materials unit cost $3.90 $3.77 Raw materials units used 11,400 10,960 Direct labor payroll $168,370 $162,945 Direct labor hours worked 14,900 15,300 Manufacturing overhead incurred $185,479 Manufacturing overhead applied $163,590 Machine hours expected to be used at normal capacity 47,190 Budgeted fixed overhead for June $51,909 Variable overhead rate per machine hour $3.00 Fixed overhead rate per machine hour $1.10

Explanation / Answer

Problem 11-8A Ayala Corporation accumulates the following data relative to jobs

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