Grub Chemical Corporation has developed cost standards for the production of its new cologne, ChocO....
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Grub Chemical Corporation has developed cost standards for the production of its new cologne, ChocO. The variable cost standards below relate to each 10 gallon batch of ChocO:
Standard Cost Per Batch
Milk cologne (2 pounds $0.85 per pound)
$
1.70
Direct labor (1.25 hours $12.00 per hour)
$
15.00
Variable overhead (1.25 hours $44.00 per hour)
$
55.00
Variable manufacturing overhead at Grub is applied based on direct labor-hours. The actual results for last month were as follows:
Number of batches produced
3,800
Direct labor-hours incurred
4,510
Pounds of cologne purchased
9,000
Pounds of cologne used in production
7,880
Cost of cologne purchased
$
7,200
Direct labor cost
$
53,218
Variable manufacturing overhead cost
$
205,700
What is ChocO's materials (milk cologne) price variance?
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