Reference no: EM131640391

Problem - Direct materials 1 pound plastic at $7 per pound$ 7Direct labor 1.6 hours at $12 per hour 19.2 Variable manufacturing overhead12Fixed manufacturing overhead4Total standard cost per unit $42.2

The predetermined manufacturing overhead rate is $10 per direct labor hour ($16 Ã 1.6). It was computed from a master manufacturing overhead budget based on normal production of 8,000 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $60,000 ($7.5 per hour) and total fixed overhead costs of $20,000 ($2.5 per hour). Actual costs for October in producing 4,800 units were as follows.

Direct materials (5,100 pounds)$ 36,720Direct labor (7,400 hours)92,500Variable overhead59,700Fixed overhead21,000    Total manufacturing costs$209,920

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.