Problem 25-2A |
Simon Manufacturing Corporation accumulates the following data relative to jobs started and finished during the month of June 2012.
Costs and Production Data |
Actual |
Standard |
||
Raw materials unit cost |
$2.25 |
$2.00 |
||
Raw materials units used |
10,600 |
10,000 |
||
Direct labor payroll |
$122,400 |
$120,000 |
||
Direct labor hours worked |
14,400 |
15,000 |
||
Manufacturing overhead incurred |
$184,500 |
|||
Manufacturing overhead applied |
$189,000 |
|||
Machine hours expected to be used at normal capacity |
42,500 |
|||
Budgeted fixed overhead for June |
$51,000 |
|||
Variable overhead rate per hour |
$3.00 |
|||
Fixed overhead rate per hour |
$1.20 |
Overhead is applied on the basis of standard machine
hours. 3.00 hours of machine time are required for each direct labor
hour. The jobs were sold for $400,000. Selling and administrative
expenses were $40,000. Assume that the amount of raw materials purchased
equaled the amount used.
Compute all of the variances for (1) direct materials and (2) direct labor.
Compute the total overhead variance.
Prepare an income statement for management. Ignore income taxes.
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