Problem 23-1A Costello Corporation manufactures a single product. The standard c

Question

Problem 23-1A Costello Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials—2 pound plastic at $6.86 per pound $ 13.72 Direct labor—2.00 hours at $11.00 per hour 22.00 Variable manufacturing overhead 13.00 Fixed manufacturing overhead 7.00 Total standard cost per unit $55.72 The predetermined manufacturing overhead rate is $10 per direct labor hour ($20.00 ÷ 2.00). It was computed from a master manufacturing overhead budget based on normal production of 11,000 direct labor hours (5,500 units) for the month. The master budget showed total variable costs of $71,500 ($6.50 per hour) and total fixed overhead costs of $38,500 ($3.50 per hour). Actual costs for October in producing 3,500 units were as follows. Direct materials (7,180 pounds) $ 50,763 Direct labor (6,860 hours) 77,655 Variable overhead 52,848 Fixed overhead 19,452 Total manufacturing costs $200,718 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. Partially correct answer. Your answer is partially correct. Try again. Compute all of the materials and labor variances. (Round answers to 0 decimal places, e.g. 125.) Total materials variance $Entry field with correct answer Entry field with correct answer UnfavorableNeither favorable nor unfavorableFavorable Materials price variance $Entry field with incorrect answer Entry field with correct answer FavorableNeither favorable nor unfavorableUnfavorable Materials quantity variance $Entry field with incorrect answer Entry field with correct answer Neither favorable nor unfavorableUnfavorableFavorable Total labor variance $Entry field with incorrect answer Entry field with correct answer UnfavorableFavorableNeither favorable nor unfavorable Labor price variance $Entry field with incorrect answer Entry field with correct answer FavorableNeither favorable nor unfavorableUnfavorable Labor quantity variance $Entry field with incorrect answer Entry field with correct answer Neither favorable nor unfavorableFavorableUnfavorable Link to Text Link to Video Partially correct answer. Your answer is partially correct. Try again. Compute the total overhead variance. Total overhead variance $Entry field with incorrect answer Entry field with correct answer UnfavorableFavorableNeither favorable nor unfavorable

Explanation / Answer

1. Material price variance = $13.72 * 3500 - $50763 = -2743 UF

2.Material quantity variance = (7000 - 7180) 6.86 = -1234.80 UF

3. Total Material Variance =Material price variance + Material quantity variance= -2743 -1234.80 = -3977.80 UF

4. Labor price variance = $22 * 3500 - $77655 = -655 UF

5. Labor quantity variance = (7000 - 6860) * 11 = 1540 F

6.Total Labor Variance =Labor price variance + Labor quantity variance= -655 + 1540 = 885 F

7. Total Overhead Variance = [3500 * (13+7)] - 72300 = -2300 UF

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