Reference no: EM132502207
Milberg Co. uses absorption costing and standard costing to improve cost control.
In 2016, the total budgeted overhead rate was $1.55 per direct labour hour. When preparing the budget, Milberg expected a monthly activity level of 10,000 direct labour hours. The monthly variable overhead cost budgeted for this level of activity was $9,500.
The following data on actual results are provided for the month of November 2016.
Materials purchased 20,000 units
Direct labour costs incurred $36,000
Total of direct labour rate and efficiency variances $ 500 F
Actual wage rate ($0.20 less than standard) $ 4.80
Underapplied variable overhead costs $ 1,065 U
Total underapplied fixed and variable overhead costs $ 2,256 U
Materials price variance $ 200 F
Materials efficiency variance $ 610 F
Price of purchased materials $ 0.60 per unit
Materials used 15,000 units
Instructions
Question 1: Identify and calculate as many different variances as you can for 2016.