Costello Corporation manufactures a single product. The standard cost per unit of product is shown below.
| Direct materials-3 pound plastic at $7.04 per pound |
|
$ 21.12 |
| Direct labor-1.50 hours at $11.00 per hour |
|
16.50 |
| Variable manufacturing overhead |
|
8.25 |
| Fixed manufacturing overhead |
|
6.75 |
| Total standard cost per unit |
|
$52.62 |
The predetermined manufacturing overhead rate is $10 per direct labor hour ($15.00 ÷ 1.50). It was computed from a master manufacturing overhead budget based on normal production of 8,400 direct labor hours (5,600 units) for the month. The master budget showed total variable costs of $46,200 ($5.50 per hour) and total fixed overhead costs of $37,800 ($4.50 per hour). Actual costs for October in producing 3,900 units were as follows.
| Direct materials (11,810 pounds) |
|
$ 84,914 |
| Direct labor (5,700 hours) |
|
64,695 |
| Variable overhead |
|
43,990 |
| Fixed overhead |
|
16,520 |
| Total manufacturing costs |
|
$210,119 |
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.
(a) Compute all of the materials and labor variances. (Round answers to 0 decimal places, e.g. 125.)
| Total materials variance |
|
$ |
|
Unfavorable/Favorable/Neither favorable nor unfavorable |
| Materials price variance |
|
$ |
|
Neither favorable nor unfavorable/Unfavorable/Favorable |
| Materials quantity variance |
|
$ |
|
Neither favorable nor unfavorable/Unfavorable/Favorable |
| Total labor variance |
|
$ |
|
Unfavorable/Favorable/Neither favorable nor unfavorable |
| Labor price variance |
|
$ |
|
Neither favorable nor unfavorable/Unfavorable/Favorable |
| Labor quantity variance |
|
$ |
|
Favorable/Unfavorable/Neither favorable nor unfavorable |
(b) Compute the total overhead variance.
| Total overhead variance |
|
$ |
|
Unfavorable/Favorable/Neither favorable nor unfavorable |