Question

Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials—1 pound plastic at $6 per pound $ 6.00 Direct labor—2.00 hours at $11.85 per hour 23.70 Variable manufacturing overhead 12.00 Fixed manufacturing overhead 12.00 Total standard cost per unit $53.70 The predetermined manufacturing overhead rate is $12 per direct labor hour ($24.00 ÷ 2.00). It was computed from a master manufacturing overhead budget based on normal production of 11,800 direct labor hours (5,900 units) for the month. The master budget showed total variable costs of $70,800 ($6.00 per hour) and total fixed overhead costs of $70,800 ($6.00 per hour). Actual costs for October in producing 3,700 units were as follows. Direct materials (3,890 pounds) $ 23,729 Direct labor (7,300 hours) 87,965 Variable overhead 63,934 Fixed overhead 26,966 Total manufacturing costs $202,594

Answer 1

It is assumed that question asked is about difference between actual and standard budgeted variances

1. Material quantity variance = (Actual - Budgeted) x standard rate = 3890 - 3700 = 190 x $6 = $1140 adverse

2. Total Material cost variance = $23,729 - $22,200 = $1529 adverse

3. Material price variance = [Standard rate - Actual rate] x Actual quantity = [6-6.1] x 3890 = $389 adverse

4. Direct Labour hours variance = (Actual - budgeted) = [7300 - (3700 x 2) ] x standard rate per hour = [7300 - 7400] x 11.85 = 100 x 11.85 = $1185 Favourable

5. Direct labour cost variance = Actual cost - Standard cost for 7,300 hours = 87,965 - 87,690 = $275 adverse

6. Direct labour rate variance = (Acutal rate - standard rate) x actual hours = (12.05 - 11.85) x 7300 = $1460 adverse

same needs to be done for variable overhead plus fixed overhead. However nothing is specified therefore I have answered as above