4, 2. 1/21/2017 Problem 23-7A Print byi Priscilia Vasquez-Groh ACCT102-50013 ACC

Question

4, 2. 1/21/2017 Problem 23-7A Print byi Priscilia Vasquez-Groh ACCT102-50013 ACCT102-50013 Managerial Accounting/Copy of Chapter 23 Homework Problem 23-7A Rogen Corporation manufactures a single product. The standard cost per unit of product is shown Direct materials-1 pound plastic at $7.00 per pound 7.00 19.20 12.00 Direct labor-1.6 hours at $12.00 per hour Varlable manufacturing overhead Fixed manufacturing overhead 4.00 Total standard cost per unit $42.20 The predetermined manufacturing overhead rate is $10 per direct labor hour ($16.001.6). It w 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 4,800 units were as follows 36,720 92,500 59,700 21,000 $209,920 Direct materials (5,100 pounds) Direct labor (7,400 hours) Variable overhead Fixed overhead Total manufacturing costs The purchasing department buys the quantities of raw materials that are expected to be use production each month. Raw materials inventories, therefore, can be ignored Compute the overhead controllable variance and the overhead volume variance Overhead controllable variance Overhead volume variance $. Question Attempts: pyright O 2000-2017 by John Wley & Sons, inc. or related companies. All rights reserved.

Explanation / Answer

Overhead Controllable Variance = Actual Hours x Budgeted Variable Overhead Rate - Actual Variable Overhead = 7,400 x x $ 7.50 - $ 59,700 = $ 4,200 Unfavorable

Overhead Volume Variance = ( Actual number of units - Budgeted units ) x Fixed Overhead Rate per Unit = ( 4,800 - 5,000) x $ 4.00 = $ 800 Unfavorable.

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