Products at the Garretson Company are produced in batches

Products at the Garretson Company are produced in batches using a standard cost system. Management budgets to make 500 of these batches per period. The overhead budget formula is $60,000 fixed costs plus $2.20 per machine hour. The standard costs per batch are as follows:

Direct Material (80 gallons per batch) $ 32 per batch

Direct Labor (60 hours per batch) 816 per batch

Overhead (60 machine hours per batch)

In producing 503 batches during the period, the following costs were incurred:

Direct Material Used (40,743 gallons) $ 15,482.34

Direct Labor (29,677 hours) 405,091.05

Actual Variable Factory Overhead 67,080.00

Actual Fixed Factory Overhead 60,050.00

Do a variance analysis for material, labor, and factory overhead.

 

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