Beluga Corp Beluga Actually Produced 330,000 Units at 75% of Capacity and Operating

question 212

Essay

Beluga Corp. has developed standard costs based on a predicted operating level of 352,000 units of production, which is 80% of capacity. Variable overhead is $281,600 at this level of activity, or $0.80 per unit. Fixed overhead is $440,000. The standard costs per unit are:
$$\begin{array} { | l | r | } \hline \text { Direct materials (0.51bs. @\$1/1b.)..... } & \$ 0.50 \text { per unit } \\\hline \text { Direct labor (1hour@\$6hour) ........ } & \$ 6.00 \text { per unit } \\\hline \text { Overhead (1hour@ } \$ 2.05 / \text { hour)........ } & \$ 2.05 \text { per unit } \\\hline\end{array}$$ Beluga actually produced 330,000 units at 75% of capacity and actual costs for the period were:
Calculate the following variances and indicate whether each variance is favorable or unfavorable:
(1) Direct labor efficiency variance: $________
(2) Direct materials price variance: $________
(3) Controllable overhead variance: $________

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Definitions:

Induction

A method of reasoning in which general principles are derived from specific observations, opposite of deduction.

Psychogenic

Refers to symptoms or conditions that originate from mental or emotional causes rather than physical ones.

Repression

Repression is a psychological defense mechanism where unpleasant thoughts, memories, or desires are kept out of conscious awareness.

Preconscious

Part of the mind that contains thoughts and feelings that are not currently in consciousness but can be readily brought to consciousness.