Response to the following problem:
Please calculate the Overhead Controllable Variance and the Overhead Volume Variance from the following information.
Dinkel Manufacturing Corporation accumulates the following data relative to jobs started and finished during the month of June 2012.
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Costs and Production Data
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Actual
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Standard
|
|
Raw materials unit cost
|
$2.25
|
$2.00
|
|
Raw materials units used
|
10,600
|
10,000
|
|
Direct labor payroll
|
$122,400
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$120,000
|
|
Direct labor hours worked
|
14,400
|
15,000
|
|
Manufacturing overhead incurred
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$184,500
|
|
|
Manufacturing overhead applied
|
|
$189,000
|
|
Machine hours expected to be used at normal capacity
|
|
42,500
|
|
Budgeted fixed overhead for June
|
|
$51,000
|
|
Variable overhead rate per hour
|
|
$3.00
|
|
Fixed overhead rate per hour
|
|
$1.20
|
Overhead is applied on the basis of standard machine hours. Three hours of machine time are required for each direct labor hour. The jobs were sold for $400,000. Selling and administrative expenses were $40,000. Assume that the amount of raw materials purchased equaled the amount used.
Compute the overhead controllable variance and the overhead volume variance. PLEASE SHOW YOUR WORK.