Korte Corporation manufactures a single product. The standard cost per unit of product is as follows.
| Direct materials—2 pounds of plastic at $5 per pound Don't use plagiarized sources. Get Your Custom Essay on korte corporation manufactures a single product the standard cost per unit of produc 543268 For $10/Page 0nly | $10 |
| Direct labor—2 hours at $12 per hour | 24 |
| Variable manufacturing overhead | 8 |
| Fixed manufacturing overhead | 6 |
| Total standard cost per unit | $48 |
The master manufacturing overhead budget for the month based on normal productive capacity of 20,000 direct labor hours (10,000 units) shows total variable costs of $80,000 ($4 per labor hour) and total fixed costs of $60,000 ($3 per labor hour). Normal productive capacity is 20,000 direct labor hours. Overhead is applied on the basis of direct labor hours. Actual costs for November in producing 9,700 units were as follows.
| Direct materials (20,000 pounds) | $98,000 |
| Direct labor (19,600 hours) | 239,120 |
| Variable overhead | 79,100 |
| Fixed overhead | 59,000 |
| Total manufacturing costs | $475,220 |
The purchasing department normally 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.
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