Costello Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials—2 pound plastic at…

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Costello Corporation manufactures a single product. The standard cost per unit of product is shown below. Direct materials—2 pound plastic at $7.46 per pound $ 14.92 Direct labor—1.50 hours at $11.00 per hour 16.50 Variable manufacturing overhead 9.75 Fixed manufacturing overhead 11.25 Total standard cost per unit $52.42 The predetermined manufacturing overhead rate is $14 per direct labor hour ($21.00 ÷ 1.50). It was computed from a master manufacturing overhead budget based on normal production of 9,000 direct labor hours (6,000 units) for the month. The master budget showed total variable costs of $58,500 ($6.50 per hour) and total fixed overhead costs of $67,500 ($7.50 per hour). Actual costs for October in producing 4,600 units were as follows. Direct materials (9,340 pounds) $ 72,292 Direct labor (6,730 hours) 75,645 Variable overhead 67,811 Fixed overhead 30,919 Total manufacturing costs $246,667 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. (a) Compute all of the materials and labor variances.

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