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Rudd Clothiers is a small company that manufactures tall-men's suits. The company has used a standard cost accounting system. In May 2017, 10,100 suits were produced. The following standard and actual cost data applied to the month of May when normal capacity was 14,000 direct labor hours. All materials purchased were used.
Cost Element
Standard (per unit)
Actual
Direct materials
7 yards at $4.70 per yard
$322,200 for 71,600 yards ($4.50 per yard)
Direct labor
1.20 hours at $13.00 per hour
$173,166 for 13,020 hours ($13.30 per hour)
Overhead
1.20 hours at $6.40 per hour (fixed $3.90; variable $2.50)
$49,400 fixed overhead $37,500 variable overhead
Overhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs were $54,600, and budgeted variable overhead was $35,000.
(a) Compute the total, price, and quantity variances for (1) materials and (2) labor.
(b) Compute the total overhead variance.
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