Problem 23-1A (part level submission) Costello Corporation manufactures a single

Question

Problem 23-1A (part level submission) Costello 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 ($28.00 + 2.00). It was computed from a master manufacturing overhead budget based on normal production of 11,800 direct labor hours (5,900 units) for the month. The master budget showed total variable costs of $70.800 (S6.00 per hour) and total fixed overhead costs of $94,400 ($8.00 per hour). Actual costs for October in producing 3,100 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 all of the materials and labor variances. (Round answers to 0 decimal places, e.g. 125.)

Explanation / Answer

Total Material Variance     Standard cost 42284     Actual cost 44563      Variance 2279 U Material Price Variance     Actual Quantity 6330     Standard rate 6.82     Actual Rate 7.04     Price Variance 1,392 U Material Quantity Variance     Standard rate 6.82     Actual Quantity 6330     Standard Quantiy 6200     Quantity Variance 887 U Total Labor Variance     Standard cost 68200     Actual cost 68501      Variance 301 U Labor Price Variance     Actual Hours 6030     Standard rate 11     Actual Rate 11.36     Price Variance 2,171 U Labor Quantity Variance     Standard rate 11     Actual Quantity 6030     Standard Quantiy 6200     Quantity Variance 1,870 F

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