Rudd Clothiers is a small company that manufactures tall-mens suits. The company has used a...
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Accounting
Rudd Clothiers is a small company that manufactures tall-mens suits. The company has used a standard cost accounting system. In May 2017, 10,400 suits were produced. The following standard and actual cost data applied to the month of May when normal capacity was 14,000 direct labor hours. All materials purchased were used.
Cost Element
Standard (per unit)
Actual
Direct materials
6 yards at $4.50 per yard
$276,760 for 62,900 yards ($4.40 per yard)
Direct labor
1.41 hours at $13.80 per hour
$219,589 for 15,464 hours ($14.20 per hour)
Overhead
1.41 hours at $7.30 per hour (fixed $4.90; variable $2.40)
$48,800 fixed overhead $36,500 variable overhead
Overhead is applied on the basis of direct labor hours. At normal capacity, budgeted fixed overhead costs were $68,600, and budgeted variable overhead was $33,600. Compute the overhead controllable variance and the overhead volume variance.
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