Question

Chill, Inc. uses standard costing for its one product, baseball bats. The standards call for 3...

Chill, Inc. uses standard costing for its one product, baseball bats. The standards call for 3 board-feet of wood at $1.40 per board-foot, and 45 minutes of work at $12 per hour. Total manufacturing overhead costs were estimated at $5,250, of which the variable portion was $0.50 per bat and the fixed portion was $0.75 per bat with an estimate of 4,200 bats to be produced (normal production).

During March, the company had the following results:

Direct labor used = 3,200 hours at a cost of $37,760

Actual manufacturing overhead fixed costs = $2,900

Actual manufacturing overhead variable costs = $2,200

Bats produced = 4,000

Instructions

Compute the following variances for March.

1.     Labor rate variance

2.     Labor quantity variance

3.     Overhead controllable variance

4.     Overhead volume variance

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