Problem:
Poochy Pride Corporation produces dog food. The company's standard cost and annual budget information are as follows:
Standard Costs per Case
Direct material (20 pounds at $2) $40.00
Direct labor (5 hours at $18) 90.00
Variable overhead (5 hours at $1.50) 7.50
Fixed overhead (5 hours at $3) 15.00
Total $152.50
Annual Budget Information
Variable overhead $150,000
Fixed overhead $300,000
Planned activity for year 100,000 direct labor hours
During October, Poochy Prtide produced 1,450 cases of dog food and incurred the following actual costs:
Actual labor cost (8,000 direct labor hours) $151,200
Actual material cost (30,000 pounds purchased and used) 66,000
Variable overhead 11,000
Fixed overhead 26,000
Required:
Prepare as complete and analysis of cost variances as is possible from the available data. Be sure to indicate whether the variance is favorable (F) or unfavorable (U).