The Queens Industrial Corp. produces a single product. Variable manufacturing overhead is applied on the basis of direct labor-hours. The standard cost for one unit of product is as follows: (1) Standard Quantity(2) Standard Price Standard
Inputs or Hours or Rate Cost (1) x (2)
Direct materials 6 ounces $0.50 per ounce $3.00
Direct labor 0.6 hours $30.00 per hour $18.00
Variable manufacturing OH 0.6hours $10.00 per hour $6.00
Total standard cost per unit $27.00
During May, 2,000 units were produced. The costs associated with May’s operations were as follows:
Materials purchased: 18,000 ounces at $0.60 per ounce……$10,800
Materials used in production: 14,000 ounces…………………………… -
Direct labor: 1,100 hours at $30.50 per hour……………….………..$33,550
Variable manufacturing overhead costs incurred………………$12,980
Required:
Compute the direct materials, direct labor, and variable manufacturing overhead variances.