Rogen Corporation manufactures product. The standard cost per unit of product is shown below.
| Direct materials - 1 pound plastic at $7.0 per pound | $7.00 |
| Direct labor - 1.6 hours at $12.00 per hour | 19.20 |
| Variable manufacturing overhead | 12.00 |
| Fixed manufacturing overhead | 4.00 |
| Total standard cost per unit | $42.20 |
The predetermined manufacturing overhead rate is $10 per direct labor hour ($16.00 / 1.6). It was computed from a master manufacturing overhead budget based on normal production of 8,000 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $60,000 ($7.50 per hour) and total fixed overhead costs of $20,000 ($2,50 per hour). Actual costs for October in producing 4,800 units were as follows.
| Direct materials(5,100 pounds) | $36,720 |
| Direct labor(7,400 hours) | 92,500 |
| Variable overhead | 59,700 |
| Fixed overhead | 21,000 |
| Total manufacturing costs | $209,920 |
Solution
