The purchasing department buys the quantities of raw

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Reference no: EM13570139

Costello Corporation manufactures a single product. The standard cost per unit of product is shown below.

Direct materials-1 pound plastic at $7.00 per pound		$ 7.00
Direct labor-1.60 hours at $12.00 per hour		19.20
Variable manufacturing overhead		12.00
Fixed manufacturing overhead		4.00
Total standard cost per unit		$42.20

The predetermined manufacturing overhead rate is $10 per direct labor hour ($16.00 ÷ 1.60). It was computed from a master manufacturing overhead budget based on normal production of 8,000 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $60,000 ($7.50 per hour) and total fixed overhead costs of $20,000 ($2.50 per hour). Actual costs for October in producing 4,900 units were as follows.

Direct materials (5,100 pounds)		$ 36,720
Direct labor (7,500 hours)		93,750
Variable overhead		59,700
Fixed overhead		21,000
Total manufacturing costs		$211,170

The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored.

(a) Compute all of the materials and labor variances. (Round answers to 0 decimal places, e.g. 125.)

Total materials variance		$
Materials price variance		$
Materials quantity variance		$
Total labor variance		$
Labor price variance		$
Labor quantity variance		$

(b) Compute the total overhead variance.

Total overhead variance

Reference no: EM13570139

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