Rondello Corporation manufactures a single product. The standard cost per unit o

Question

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

Direct materials Rondello Corporation manufactures a single product. The standard cost per unit of product is shown below.

Direct materials Problem 22-7A Rondello Corporation manufactures a single product. The standard cost per unit of product is shown below. The predetermined manufacturing overhead rate is $14 per direct labor hour ($28 ÷ 2.00). It was computed from a master manufacturing overhead budget based on normal production of 10,600 direct labor hours (5,300 units) for the month. The master budget showed total variable costs of $74,200 ($7.00 per hour) and total fixed overhead costs of $74,200 ($7.00 per hour). Actual costs for October in producing 5,200 units were as follows. 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. Compute the overhead controllable variance and the overhead volume variance.

Explanation / Answer

the overhead controllable variance =Variable overhead controllable variance + Fixed overhead controllable variance

= ( 7*10260 -105706) + (74200-42024)

= $ 1710 Unfavorable

the overhead volume variance.= Variable overhead volume variance + Fixed overhead volume variance

= (10400*7 - 10260*7) + (10400*7-74200)

= $ 420 Un favorable

Answer:

Compute the overhead controllable variance and the overhead volume variance.

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