Pato Company produces leather sandals. The company employs a standard costing
system and has the following standards in order to produce one pair of sandals:
standard quantity standard price
direct materials 2 leather strips ?? per strip
direct labor 2.5 hours $12 per hour
variable overhead 2.5 hours ?? per hour
During May, Pato purchased leather strips at a total cost of $124,250 and had
direct labor totaling $171,100. During May, Pato used 13,600 leather strips in
the production of sandals. Pato had no beginning inventories of any type for
May. At May 31, Pato had 600 leather strips remaining in its direct materials
inventory.
Pato Company reported the following variances for May:
Direct material price variance $7,100 favorable
Direct labor rate variance $29,500 unfavorable
Total direct labor variance $8,900 favorable
Variable overhead spending variance $2,440 favorable
Variable overhead efficiency variance $34,560 favorable
Required:
1. Calculate the actual variable overhead cost incurred by Pato Company in May.