Problem 25-1A Problem 25-1A Rogen Corporation manufactures a single product. The
ID: 2512137 • Letter: P
Question
Problem 25-1A
Problem 25-1A
Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below.Direct materials—1 pound plastic at $6 per pound $ 6.00 Direct labor—2.00 hours at $11.90 per hour 23.80 Variable manufacturing overhead 12.00 Fixed manufacturing overhead 20.00 Total standard cost per unit $61.80
The predetermined manufacturing overhead rate is $16 per direct labor hour ($32.00 ÷ 2.00). It was computed from a master manufacturing overhead budget based on normal production of 10,400 direct labor hours (5,200 units) for the month. The master budget showed total variable costs of $62,400 ($6.00 per hour) and total fixed overhead costs of $104,000 ($10.00 per hour). Actual costs for October in producing 4,100 units were as follows.
Direct materials (4,240 pounds) $ 26,288 Direct labor (8,030 hours) 97,163 Variable overhead 99,710 Fixed overhead 33,390 Total manufacturing costs $256,551
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 $
Neither favorable, nor unfavorable, Unfavorable, Favorable
Materials price variance $Neither favorable nor unfavorableUnfavorableFavorable
Materials quantity variance $UnfavorableFavorableNeither favorable nor unfavorable
Total labor variance $FavorableUnfavorableNeither favorable nor unfavorable
Labor price variance $FavorableNeither favorable nor unfavorableUnfavorable
Labor quantity variance $UnfavorableNeither favorable nor unfavorableFavorable
(b)
Compute the total overhead variance.
Total overhead variance $
Neither favorable nor unfavorableFavorableUnfavorable
Explanation / Answer
Total materials variance =SQ* SP - AQ*AP = 4100*6 - 26288 =1688 unfavorable
Materials price variance =AQ* SP - AQ*AP =4240*6-26288=848 unfavorable
Materials quantity variance=SQ* SP - AQ* SP = 4100*6 -4240*6 =840 unfavorable
Total labor variance=SH* SP -AH*AP =4100*23.80 -97163=417 favorable
Labor quantity variance =SH* SP - AH* SP =4100*23.80-8030*11.90=2023 favorable
Total Overhead variance =Actual Overhead - Standared overhead =
Total materials variance =SQ* SP - AQ*AP = 4100*6 - 26288 =1688 unfavorable
Materials price variance =AQ* SP - AQ*AP =4240*6-26288=848 unfavorable
Materials quantity variance=SQ* SP - AQ* SP = 4100*6 -4240*6 =840 unfavorable
Total labor variance=SH* SP -AH*AP =4100*23.80 -97163=417 favorable
Labor price variance=AH* SP - AQ*AP =8030*11.90 -97163 =1606 unfavorableLabor quantity variance =SH* SP - AH* SP =4100*23.80-8030*11.90=2023 favorable
Total Overhead variance =Actual Overhead - Standared overhead =
Total overhead variance =99710+33910-4100*(20+12)=2420 UnfavorableRelated Questions
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