Overhead is applied on the basis of standard machine hours

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Reference no: EM13481594

Hmanufacturing Corporation accumulates the following data 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.

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

Reference no: EM13481594

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