 | P25-3A (a) Rapache
Clothiers is a small company that manufactures tall-men’s suits. The
company has used a standard cost system. In May 2008, 11,200 suits were
produced. The following standard and actual cost data applied to the
month of May when normal capacity was 14,000 direct labor hours. All
materials purchased were used. Cost Element | | Standard (per unit) | | Actual | | Direct materials | | 8 yards at $4.30 per yard | | $371,050 for 90,500 yards
($4.10 per yard) | | Direct labor | | 1.2 hours at $13.50 per hour | | $201,630 for 14,300 hours
($14.10 per hour) | | Overhead | | 1.2 hours at $6.00 per hour | | $49,000 fixed overhead | | | | (fixed $3.50; variable $2.50) | | $37,000 variable overhead |
Overhead is applied on the basis of direct labor hours. At normal
capacity, budgeted fixed overhead costs were $49,000, and budgeted
variable overhead was $35,000. Instructions
Compute the total, price, and quantity variances for (1) materials and
(2) labor, and (3) the total, controllable, and volume variances for
manufacturing overhead. | |
