The O'Toole Company makes a single product and uses standard costing. Some data concerning this...
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Accounting
The O'Toole Company makes a single product and uses standard costing. Some data concerning this product for the year follow:
| Standard Hours | Standard Rate per Hour | Standard Cost | ||||||||
| 90 minutes (1.5 hours) | $12.00 | $18.00 | ||||||||
The company manufactured and sold 10,000 units of product during the year. The company worked 14,000 direct labour hours during the year at a cost of $11.50 per hour. Overhead cost is applied to products on the basis of direct labour hours.
1) Compute the direct labour rate, labour efficiency and total variances for the year.
2) The budgeted variable manufacturing overhead rate is $4.00 per direct labour-hour. During the year, the company incurred $58,290 in variable manufacturing overhead cost. Compute the variable overhead spending, efficiency and total variances for the year.
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