P11-2a ayala corporation accumulates the following data relative to


P11-2a ayala corporation accumulates the following data relative to

P11-2A Ayala Corporation accumulates the following data relative to jobs started and finished during the month of June 2014.
Costs and Production Data Actual Standard Raw materials unit cost $2.25 $2.10 Raw materials units used 10,600 10,000Direct labor payroll $120,960 $120,000Direct labor hours worked 14,400 15,000
Manufacturing overhead incurred $189,500Manufacturing overhead applied $189,000Machine hours expected to be used at normal capacity 42,500Budgeted fixed overhead for June $55,250 Variable overhead rate per machine hour $3.00Fixed overhead rate per machine hour $1.30
Overhead is applied on the basis of standard machine hours. Three hours of machine time are required for each direct labor hour. The jobs were sold for $400,000. Selling and administrative expenses were $40,000. Assume that the amount of raw materials purchased equaled the amount used.
Instructions(a) Compute all of the variances for (1) direct materials and (2) direct labor. (b) Compute the total overhead variance. (c) Prepare an income statement for management. (Ignore income taxes.)

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