Question

Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below.

Direct materials—1 pound plastic at $7.00 per pound		$ 7.00
Direct labor—2.5 hours at $11.80 per hour		29.50
Variable manufacturing overhead		17.50
Fixed manufacturing overhead		17.50
Total standard cost per unit		$71.50

The predetermined manufacturing overhead rate is $14.00 per direct labor hour ($35.00 ÷ 2.5). It was computed from a master manufacturing overhead budget based on normal production of 13,250 direct labor hours (5,300 units) for the month. The master budget showed total variable costs of $92,750 ($7.00 per hour) and total fixed overhead costs of $92,750 ($7.00 per hour). Actual costs for October in producing 3,900 units were as follows.

Direct materials (4,030 pounds)		$ 28,613
Direct labor (9,600 hours)		116,160
Variable overhead		103,738
Fixed overhead		34,862
Total manufacturing costs		$283,373

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.

Compute all of the materials and labor variances.

Compute the total overhead variance.

Answer 1