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Rondello Corporation manufactures a single product. The standard cost per unit of product is shown below.
The predetermined manufacturing overhead rate is $10 per direct labor hour ($5 ÷ 0.50). It was computed from a master manufacturing overhead budget based on normal production of 2,800 direct labor hours (5,600 units) for the month. The master budget showed total variable costs of $19,600 ($7.00 per hour) and total fixed overhead costs of $8,400 ($3.00 per hour). Actual costs for October in producing 4,600 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. (a) Compute all of the materials and labor variances.
(b) Compute the total overhead variance.
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