Direct materials (3.0 pounds @ $4.00 per pound) Direct labor (1.7 hours @ $13.00 per hour) Overhead (1.7 hours @ $18.50 per hour) $ 12.00 22.10 31.45 Standard cost per unit $ 65.55 The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level of the factory's capacity of 20,000 units per month. Following are the company's budgeted overhead per month at the 75% capacity level. Overhead Budget (75% Capacity) Variable overhead costs $ 15,000 75,000 15,000 30,000 135,000 Indirect materials Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Depreciation-Building Depreciation-Machinery 23,000 72,000 17,000 Taxes and insurance 224,750 336,750 Supervisory salaries Total fixed overhead costs Total overhead costs $ 471,750 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,500 pounds @ $4.20 per pound) Direct labor (22.000 hours a $13.30 per hour) $ 195,300 292.600
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
3. Compute the direct labor variance, including its rate and efficiency variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Round "Rate per hour" answers to two decimal places.)
The drop down options under "actual
The drop down options for the left bottom 3 rows are: total variable overhead cost variance, variable overhead efficiency variance, variable overhead spending variance, volume variance, direct material variance, Direct labor efficiency variance, direct labor rate variance, direct materials price variance, direct materials quantity variance.
the drop down options for the right yellow 3 columns are: favorable, unfavorable, no variance
please use the exact format as shown in photos. Thank you !
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