Reference no: EM132939013
Question - J. R. Richard Company employs a standard absorption system for product costing. The standard cost of its product is as follows:
Direct materials $14.50
Direct labor (2 direct labor hours x $8) 16.00
Manufacturing overhead (2 direct labor hours x $11) 22.00
Total standard cost $52.50
The manufacturing overhead rate is based upon a normal activity level of 600,000 direct labor hours. Richard planned to produce 25,000 units each month during the year. The budgeted annual manufacturing overhead is:
Variable $3,600,000
Fixed 3,000,000
$6,600,000
During November, Richard produced 26,000 units. Richard used 53,500 direct labor hours in November at a cost of $433,350. Actual manufacturing overhead for the month was $250,000 fixed and $325,000 variable.
Required - Find the manufacturing overhead controllable variance for November?