Raisen incs budget included the following overhead costs

Reference no: EM13570541

Raisen, Inc.s budget included the following overhead costs for the current year assuming operations at 80% of capacity, or 40,000 units:

Total Variable overhead: 240,000
Total fixed overhead: 560,000
Total Overhead: 800,000

Standard cost per unit when operating at this same 80% capacity level is:
Direct Materials (5 lbs. @ 4/lb.): 20.00
Direct Labor (2 hrs. @ 8.75/hr): 17.50
Variable overhead (2hrs @ 3/hr): 6.00
Fixed Overhead (2hrs. @ 7/hr): 14.00
Total Cost per unit: 57.50

The actual production achieved in the current year was 60% of capacity, or 30,000 units. The actual costs were:

Direct Materials (150,350 lbs.): 616435
Direct Labor (59,800 hrs.): 520,260
Variable Overhead: 192,000
Fixed Overhead: 552,000

Calculate the following variances and indicate whether each is favorable or unfavorable:

Direct Materials:
Price variance
_____
Quantity Variance

Direct Labor:
Rate Variance
_____
Efficiency Variance

Reference no: EM13570541

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