Costello Corporation manufactures a single product. The standard cost per unit o
ID: 2482534 • Letter: C
Question
Costello Corporation manufactures a single product. The standard cost per unit of product is shown below. The predetermined manufacturing overhead rate is $14 per direct labor hour ($14 Division Sign 1.00). It was computed from a master manufacturing overhead budget based on normal production of 5,100 direct labor hours (5,100 units) for the month. The master budget showed total variable costs of $35,700 ($7.00 per hour) and total fixed overhead costs of $35,700 ($7.00 per hour). Actual costs for October in producing 3,500 units were as follows. 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. 5,275.) Click if you would like to Show Work for this question: The parts of this question must be completed in order. This part will be available when you complete the bove.Explanation / Answer
Budget standard cost for producing actual units 3500 Standard quantity for producing actual units Direct material @ 1 pound plastic at $7 per pund 7 24,500 3500 Pound Direct labor @ 1 hour at $12 per hour 12 42,000 3500 Hour Variable manufacturing overhead $7 per hour 7 24,500 Fixed manufacturing overhead $7 per hour 7 24,500 Total 33 115,500 Actual Price Quantity Direct materials @ 7.30 per unit 26,645 3650 7.30 Direct labor @ 12.38 per hour 41,225 3330 12.38 Variable overhead 35,623 Fixed overhead 15,507 119,000 Total material variance (2,145) Material price variance 1095 standard cost - actual cost * actual quantity Material quantity variance 150 Pounds Total labor variance 775 Actual - standard Labor price variance 1265.4 standard cost - actual cost * actual quantity Labor quantity variance 170 Actual - standard