Costello Corporation manufactures a single product. The standard cost per unit of product is shown below.
|Direct materials 2 pound plastic at $6.52 per pound||$ 13.04|
|Direct labor 2.50 hours at $12.00 per hour||30.00|
|Variable manufacturing overhead||20.00|
|Fixed manufacturing overhead||20.00|
|Total standard cost per unit||$83.04|
The predetermined manufacturing overhead rate is $16 per direct labor hour ($40.00 2.50). It was computed from a master manufacturing overhead budget based on normal production of 15,000 direct labor hours (6,000 units) for the month. The master budget showed total variable costs of $120,000 ($8.00 per hour) and total fixed overhead costs of $120,000 ($8.00 per hour). Actual costs for October in producing 4,100 units were as follows.
|Direct materials (8,350 pounds)||$ 56,446|
|Direct labor (10,130 hours)||125,004|
|Total manufacturing costs||$347,600|
The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored.
(a) Compute all of the materials and labor variances. (Round answers to 0 decimal places, e.g. 125.)
|Total materials variance||$||UnfavorableNeither favorable nor unfavorableFavorable|
|Materials price variance||$||UnfavorableFavorableNeither favorable nor unfavorable|
|Materials quantity variance||$||Neither favorable nor unfavorableUnfavorableFavorable|
|Total labor variance||$||FavorableNeither favorable nor unfavorableUnfavorable|
|Labor price variance||$||UnfavorableFavorableNeither favorable nor unfavorable|
|Labor quantity variance||$||FavorableNeither favorable nor unfavorableUnfavorable|
(b) Compute the total overhead variance.
|Total overhead variance||$||Neither favorable nor unfavorableFavorableUnfavorable|
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