Problem 11-1A Your answer is partially correct. Try again. Rogen Corporation man
ID: 2560901 • Letter: P
Question
Problem 11-1A Your answer is partially correct. Try again. 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 overhead Fixed manufacturing overhead Total standard cost per unit $ 7 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 ma00 ($2.5 per hour), Actual costs for Oct labor hours (5.,000 units) for the month. The master budget showed total variable costs of s manufacturing overhead budget based on normal production of 8,000 d $60,000 ($7.5 per hour) and total fixed overhead costs of $20,000 ($2.5 per hour) Direct materials (5,100 pounds) Direct labor (7,400 hours) Variable overhead Fixed overhead 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, t herefore, can be ignored. Compute all of the materñials and labor variances. (Round answers to o decimal places, e.g. 125.) Total materials variance Materials price variance UnfavorabieExplanation / Answer
SOLUTION
A. Total Materials Variance = (Actual quantity * Actual price) - (Standard quantity * Standard Price)
= $36,720 - (4,800 * $7)
= $36,720 - $33,600 = $3,120 (U)
Material Price Variance = (Actual quantity * Actual price) - (Actual quantity * Standard Price)
= $36,720 - (5,100 * $7)
= $36,720 - $35,700 = $1,020 (U)
Materials Quantity Variance = (Actual quantity * Standard price) - (Standard quantity * Standard Price)
= (5,100 * $7) - (4,800 * $7)
= $35,700 - $33,600 = $2,100 (U)
Total Labor Variance = (Actual hours * Actual rate) - (Standard hours * Standard rate)
= $92,500 - (7,680 * $12)
= $92,500 - $92,160 = $340 (U)
Standard hours = 4,800 * 1.6 = 7,680
Labor price variance = (Actual hours * Actual rate) - (Actual hours * Standard rate)
= $92,500 - (7,400 * $12)
= $92,500 - $88,800 = $3,700 (U)
Labor quantity variance = (Actual hours * Standard rate) - (Standard hours * Standard rate)
= (7,400 * $12) - (7,680 * $12)
= $88,800 - $92,160 = $3,360 (F)
B. Total overhead variance = Actual Overhead - Overhead Applied
= ($59,700 + $21,000) - (7,680 * $10)
= $80,700 - $76,800 = $3,900(U)