Rondello Corporation manufactures a single product. The standard cost per unit of product is shown below.
Direct materials”1 pound plastic at $7.70 per pound Ac€¦Ac€¦Ac€¦Ac€¦.. $ 7.70
Direct labor”1.5 hours at $13.20 per hour Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦ 19.80
Variable manufacturing overhead Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦.. 12.38
Fixed manufacturing overhead Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦.. 4.13
Total standard cost per unit Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦ $44.01
The predetermined manufacturing overhead rate is $10 per direct labor hour ($15.00 Af· 1.5). It was computed from a master manufacturing overhead budget based on normal production of 7,500 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $56,250 ($7.50 per hour) and total fixed overhead costs of $18,750 ($2.50 per hour). Actual costs for October in producing 4,900 units were as follows.
Direct materials (5,120 pounds) Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦.. $ 41,114
Direct labor (7,000 hours) Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦ 96,250
Variable overhead Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦ 61,787
Fixed overhead Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦. 21,648
Total manufacturing costs Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦Ac€¦ $220,799
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.
Instructions
(a) Compute all of the materials and labor variances.
(b) Compute the total overhead variance.
Total materials variance $ _____ UnfavorableFavorable
Materials price variance $________ FavorableUnfavorable
Materials quantity variance $_______ UnfavorableFavorable
Total labor variance $________ UnfavorableFavorable
Labor price variance $______ UnfavorableFavorable
Labor quantity variance $ ______ UnfavorableFavorable