Problem 23-1A 1121/2017 Print by: Priscilla Vasquez-Groh c SoI:CCT-So1 Manageria

Question

Problem 23-1A 1121/2017 Print by: Priscilla Vasquez-Groh c SoI:CCT-So1 Managerial Accounting Copy of Chapter 23 Homework Problem 23-1A Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below s 7 19.2 12 Direct materials-1 pound plastic at $7 per pound Direct labor-1.6 hours at $12 per hour Variable manufac Fixed manufacturing overhead $42.2 Total standard cost per unit The predetermined manufacturing overhead rate is $10 per direct labor hour ($16 ÷ 1.6). It was computed from a master manufacturing overhead budget based on normal production of 8,000 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of s60,000 ($7.5 per hour) and total fixed overhead costs of $20,000 ($2.5 per hour) for October in producing 4,800 units were as follows Direct materials (5,100 pounds) 36,720 Direct labor (7,400 hours) Variable overhead Fixed overhead 92,500 59,700 21,000 $209,920 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 Compute all of the materials and labor variances. (Round answers to O decimal places, e.g 125.) Total materials variance Materials price variance 36,720 Materials quantity variance s Total labor variance Labor price variance Labor quantity variance $ Compute the total overhead variance Total overhead variance s ohndassinnment/test/qprint.uni

Explanation / Answer

Total Material variance Actual units * actual rate - Standard Units * Standard rate (5,100*7.2) - (4,800*7) 36,720-33,600 3,120 (F)    Direct Material Price Variance                                  =Actual quantity (Actual price- Std. price) 5,100(7.2-7) 1020 (UF)        Direct Material Quantity Variance                                  = Std. Price (Actual Quantity -Std. Quantity) 7(5,100-4,800) 2100 (UF) Total Labor rate variance Actual Hours * Actual rate - Standard Hours * Standard rate 92,500 - (4,800*1.6)*12 340 (UF)      Labor rate variance                                           = Ah * (AR-SR) 7,400hrs(12.50-12) 3700 (UF)     Labor Quantity variance                                             = SR *(AH-SH) 12(7,400-7,680) 3360 (F) Total overhead variance (Actual Units * Budgeted rate per Unit) - Total Manufacturing Overhead incurred (4,800*16)-(59,700+21,000) 76,800-80,700 3900 (F)

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