Compute the materials price and usage variances

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Reference no: EM13884413

Problem: Compute materials, labor, and overhead variances

Based on a standard volume of output of 96,000 units per month, the standard cost of the project manufactured by Tahoe Company consists of:

Direct materials (0.25 pounds x $8 per pound)

$2.00

Direct labor (0.5 hours x $7.60 per hour)

3.80

Variable manufacturing overhead

2.50

Fixed manufacturing overhead ($144,000 in total)

1.50

Total

$9.80

A total of 25,200 pounds of materials was purchased at $8.40 per pound. During May, 98,400 units were produced with the following costs:

Direct materials used (24,000 pounds at $8.40)

$201,600

Direct labor (50,000 hours at $7.80)

390,000

Variable manufacturing overhead

249,000

Fixed manufacturing overhead

145,000

Required: Compute the materials price and usage variances, the labor rate and efficiency variances and the overhead budget and volume variances. (Overhead is applied based on units produced.)

Reference no: EM13884413

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