Rogen Corporation manufactures a single product. The standard cost per unit of p

Question

Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below. The predetermined manufacturing overhead rate is $12 per direct labor hour ($18.00 1.50). It was computed from a master manufacturing overhead budget based on normal production of 9,000 direct labor hours (6,000 units) for the month. The master budget showed total variable costs of $54,000 ($6.00 per hour) and total fixed overhead costs of $54,000 ($6.00 per hour). Actual costs for October in producing 3,500 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.) Total materials variance Materials price variance Materials quantity variance Total labor variance Labor price variance Labor quantity variance Compute the total overhead variance. Total overhead variance

Explanation / Answer

Material Price Variance = ( Standard Price- Actual Price)* Actual Qty (7-25986/3660)*3660 (7-7.1)*3660 $ 366 Unfavourable Material Quantity Variance = ( Standard Qty- Actual Qty) Standard Price ( 6000-3660)*7 $ 16380 Favourable Labour Price Variance = ( Standard Price- Actual Price)* Actual Hrs ( 11-59110/5140)*5140 $ 2570 Unfavourable Labour Quantity Variance = ( Standard Hrs- Actual Hrs) Standard Price ( 9000-5140)*11 $ 42460 Favourable

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