Ravena Labs., Inc makes a single product which has the following standards: Dire

Question

Ravena Labs., Inc makes a single product which has the following standards:
Direct materials 2.5 ounces at $20 per ounce
Direct labor 1.4 hours at $12.50 per hour
Var. manufacturing overhead 1.4 hours at ? per hour

Variable manufacturing overhead is applied on the basis of direct labor hours. The following data are available for October:

3750 units of compound were produced during the month
There was no beginning direct materials inventory
The ending direct materials inventory was 2000 ounces
Direct materials purchased: 12000 ounces for $225000
Direct labor hours worked: 5,600 hours at a cost of $67,200
Variable manufacturing overhead costs incurred amounted to $18,200
Variable manufacturing overhead applied to products: $18375

The direct materials quantity variance for October is:

Explanation / Answer

Raw Materials Inventory $240,000
Cr Accounts Payable $225,000
Cr MPV $15,000

variable overhead efficiency variance for October is= $15,000 favorable

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