The predetermined manufacturing overhead rate of 14 per

Reference no: EM13576885

Costello corporation manufactures a single product. The standard cost per unit of product is shown below:

Direct materials - 2 pound plastic at $7.71 per pound - $15.42
Direct labor - 2.00 hours at $11.00 per hour - $22.00
Variable Manufacturing overhead - $12.00
Fixed Manufacturing overhead - $16.00
Total standard cost per unit - $65.42

The predetermined manufacturing overhead rate of $14 per direct labor hour ($28.00 / 2.00). It was computed from a master manufacturing overhead budget based on normal production of 10,200 direct labor hours (5,100 units for the month). The master budget showed total variable costs of $61,200 ($6.00 per hour) and total fixed overhead costs of $81,600 ($8.00 per hour). Actual costs for October in producing 4,200 units were as follows:

Direct materials (8,570 pounds) - $67,189
Direct labor (8,270 hours) - $93,368
Variable overhead - $89,609
Fixed overhead - $30,021
Total manufacturing costs - $280,187

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.
A. Compute all of the materials and labor variances and favorable/unfavorable/neither

Total materials variances
Materials price variances
Materials quantity variances
Total labor variance
Labor price variance
Labor quantity variance

Reference no: EM13576885

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