Compute the total overhead variance

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Reference no: EM1368336

Dinkel Manufacturing Company accumulates the following information relative to jobs started and finished during the month of June 2008.

Costs and Production Data Actual Standard
Raw materials unit cost $2.25 $2.00
Raw materials units used 10,600 10,000
Direct labor payroll $122,400 $120,000
Direct labor hours worked 14,400 15,000
Manufacturing overhead incurred $184,500
Manufacturing overhead applied $189,000
Machine hours expected to be used at normal capacity 42,500
Budgeted fixed overhead for June $51,000
Variable overhead rate per hour $3.00
Fixed overhead rate per hour $1.20

Overhead is applied on the basis of standard machine hours. Three hours of machine time are required for each direct labor hour. The jobs were sold for $400,000. Selling and administrative expenses were $40,000. Assume that the amount of raw materials purchased equaled the amount used.
Hint:
Compute variances, and prepare income statement.

Instructions

(a) Compute all of the variances for (1) direct materials and (2) direct labor.

(b) Compute the total overhead variance.

Reference no: EM1368336

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