Rogen Corporation manufactures a single product. The standard cost per unit of p
ID: 2437309 • Letter: R
Question
Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below Direct materials-1 pound plastsc at $7 per pound Direct labor-1.6 hours at $12 per hour Variable manufacturing overhead s 7 19.2 12 Fixed manfacta Total standard cost per unit ing overhead mandacturing overhead rate es $10 per deeet labor hour (S 16 + 1.6). It was com puted horn a master manufacturing overhead budget based on rannal prodaton ed·00 dine lator hours The (5,000 unts) for the month. The master budget showed total variabile costs of $60,000 ($7.5 per hour) and total foxed overhead costs of $20,000 (32.S per hour). Actual costs for October in geodacing 4,800 units were as follows Direct matenals(5,100 pounds) Direct labor (7,400 hours Variable overhead Fxed overhead 36,720 92,500 59,700 21,000 $209.920 Total manufacturing costsExplanation / Answer
Answers
Actual DATA for
4800
units
Quantity (AQ)
Rate (AR)
Actual Cost
Direct Material
5100
$ 7.200
$ 36,720.00
Direct labor
7400
$ 12.50
$ 92,500.00
Variable Overhead
7400
$ 8.07
$ 59,700.00
Standard DATA for
4800
units
Quantity (SQ)
Rate (SR)
Standard Cost
Direct Material
4800
$ 7.00
$ 33,600.00
Direct labor
7680
$ 12.00
$ 92,160.00
Variable Overhead
7680
$ 7.50
$ 57,600.00
Note: Spending Variance calculated below = Total Variance
Material Price Variance
(
Standard Rate
-
Actual Rate
)
x
Actual Quantity
(
$ 7.00
-
$ 7.20
)
x
5100
-1020
Variance
$ 1,020.00
Unfavourable-U
Material Quantity Variance
(
Standard Quantity
-
Actual Quantity
)
x
Standard Rate
(
4800
-
5100
)
x
$ 7.00
-2100
Variance
$ 2,100.00
Unfavourable-U
Material Spending Variance
(
Standard Cost
-
Actual Cost
)
(
$ 33,600.00
-
$ 36,720.00
)
-3120
Variance
$ 3,120.00
Unfavourable-U
Labor Rate Variance
(
Standard Rate
-
Actual Rate
)
x
Actual Labor Hours
(
$ 12.00
-
$ 12.50
)
x
7400
-3700
Variance
$ 3,700.00
Unfavourable-U
Labour Efficiency Variance
(
Standard Hours
-
Actual Hours
)
x
Standard Rate
(
7680
-
7400
)
x
$ 12.00
3360
Variance
$ 3,360.00
Favourable-F
Labor Spending Variance
(
Standard Cost
-
Actual Cost
)
(
$ 92,160.00
-
$ 92,500.00
)
-340
Variance
$ 340.00
Unfavourable-U
Standard variable overhead = 57600
Actual Variable overhead = 59700
Variance = 57600 – 59700 = 2100 Unfavourable
Fixed Overhead Budgeted = $ 20,000
Actual Fixed overhead = $ 21,000
Variance = 20000 – 21000 = 1000 Unfavourable.
TOTAL OVERHEAD VARIANCE = 2100 + 1000 = $ 3,100 Unfavourable.
Actual DATA for
4800
units
Quantity (AQ)
Rate (AR)
Actual Cost
Direct Material
5100
$ 7.200
$ 36,720.00
Direct labor
7400
$ 12.50
$ 92,500.00
Variable Overhead
7400
$ 8.07
$ 59,700.00
Standard DATA for
4800
units
Quantity (SQ)
Rate (SR)
Standard Cost
Direct Material
4800
$ 7.00
$ 33,600.00
Direct labor
7680
$ 12.00
$ 92,160.00
Variable Overhead
7680
$ 7.50
$ 57,600.00
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