Hello, Can I get helo with this. Costello Corporation manufactures a single prod

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Hello,

Can I get helo with this.

Costello Corporation manufactures a single product. The standard cost per unit of product is shown below Direct materials-2 pound plastic at $6.70 per pound Direct labor-1.50 hours at $11.00 per hour Variable manufacturing overhead Fixed manufacturing overhead Total standard cost per unit $13.40 16.50 9.00 12.00 $50.90 The predetermined manufacturing overhead rate is $14 per direct labor hour ($21.00 ÷ 1.50). It was computed from a master manufacturing overhead budget based on normal production of 8,250 direct labor hours (5,500 units) for the month. The master budget showed total variable costs of $49,500 ($6.00 per hour) and total fixed overhead costs of $66,000 ($8.00 per hour). Actual costs for October in producing 3,300 units were as follows Direct materials (6,760 pounds) Direct labor (4,810 hours) Variable overhead Fixed overhead 46,779 54,401 53,220 17,930 $172,330 Total manufacturing costs 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

Explanation / Answer

(Unless otherwise specified, all amounts in $) Total Material Variance = Budgeted Material Costs - Actual Material Cost Budgeted Material Cost is 3,300 units X 2 pound per unit X $ 6.70 per pound = 44220 Actual Material Costs are 46779 Total Material Variance -2559 Unfavourable Materials Price Variance = (Standard Price per unit - Actual price per unit) X Actual materials used Actual price per unit is $ 46,779 / 6,760 pounds = $ 6.92 pounds per unit Materials Price Variance -1487 Unfavourable Materials Quantity Variance = (Standard quantity per unit - Actual quantity per unit) X Standard rate per unit Standard quantity per unit = 3,300 units X 2 pounds per unit = 6,600 pounds Materials Quantity Variance -1072 Unfavourable Total Labor Variance = Budgeted Labour Costs - Actual Labour Costs Budgeted Labour Costs are 3,300 units X 1.5 hour per unit X $ 11 per hour = 54450 Actual Labour Costs incurred are 54401 Total Labor Variance 49 Favourable Labor Price or Rate Variance = (Standard Rate per hour - Actual Rate per hour) X Actual number of hours worked Actual Rate per hour = $ 54,401 / 4,810 = $ 11.31 per labor hour Labor Price Variance -1491 Unfavourable Labor Efficiency Variance = (Standard Number of Hours - Actual Number of Hours) X Standard Rate per labor hour Standard Number of Hours = 3,300 units X 1.5 hour per unit = 4,950 hours Labor Efficiency Variance 1540 Favourable Total Overhead Variance = Standard Overhead Costs - Actual Overhead Costs Standard Overhead Costs = 3,300 units X $ 21 per unit = 69300 Actual Overhead Costs 71150 Total Overhead Variance -1850 Unfavourable

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