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Coop Corporation Standards and Variances
Coop Corporation manufactures a single product. The standard cost per unit of
product is shown below:
Direct materials, 1 pount plastic at $7 per pound					$ 7.00
Direct labor, 1.6 hours at $12 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 [($12.00 + $4.00)/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 are shown below.
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
The purchasing department buys the quantities of raw materials that are expected to be
used in production each month. Raw materials inventories, therefore, can be ignored.
Required:
1) Please compute the materials price and quantity variances.
2) Please compute the labor rate and efficiency variances.
3) Please compute the variable manufacturing overhead rate and efficiency variances.

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