Required information Use the following information for the Quick Study below. [T

Question

Required information Use the following information for the Quick Study below. [The following information applies to the questions displayed below.] BatCo makes metal baseball bats. Each bat requires 1.00 kg of aluminum at $24 per kg and 0.25 direct labor hours at $18 per hour. Overhead is assigned at the rate of $32 per direct labor hour. QS 8-6 Cost variances LO C2 Assume the actual cost to manufacture one metal bat is $42.50. Compute the cost variance and classify it as favorable or unfavorable Qty per Unit Cost per Input Total Direct materials Direct labor / Overhead

Explanation / Answer

Qty per Unit Cost per Input Total Direct Materials 1 $    24.00 $    24.00 Direct Labor 0.25 $    18.00 $       4.50 Overhead 0.25 $    32.00 $       8.00 Total $    36.50 Actual cost is more than Standard cost of one unit.It shows that there is Unfavorable cost variance. Difference in cost = Actual cost-Standard cost = $    42.50 - $    36.50 = $       6.00 Thus, Cost Variance is $ 6.00 Unfavorable

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