Landram Corporation makes a product with the following standard costs:
| Inputs |
Standard Quantity or Hours |
Standard Price or Rate |
| Direct materials |
2.0 kilos |
$7.00 per kilo |
| Direct labor |
1.3 hours |
$11.00 per hour |
| Variable overhead |
1.3 hours |
$3.00 per hour |
|
In March the company produced 5,000 units using 10,310 kilos of the direct material and 2,290 direct labor-hours. During the month, the company purchased 10,880 kilos of the direct material at a cost of $76,760. The actual direct labor cost was $38,241 and the actual variable overhead cost was $11,942.
|
| The company applies variable overhead on the basis of direct labor-hours. The direct materials price variance is computed when the materials are purchased. |