Reference no: EM132500064

Question - O'Malley Company manufactures a single product. The following standard costs have been developed for it:

Direct materials: 4 lbs. @ $6/lb.

Direct labor: 3 hours @ $15 /hr.

Variable overhead: 3 DLH @ $8/hr.

Budgeted fixed overhead: $27,000 per month; FOH is applied to products on the basis of standard direct labor hours per unit at a denominator activity of 3,000 units per month.

During the most recent month the following results occurred: 3,200 units of product were produced; 15,000 lbs. of material were purchased at a cost of $105,000 and 13,000 lbs. were used in production. 10,000 hours of direct labor were used at a cost of $156,250. Actual variable overhead for the month was $71,500; actual fixed overhead was $26,600.

Required - Calculate the variances for the manufacturing costs of O'Malley for the most recent month.