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Tanzania [10]
3 years ago
5

BatCo makes metal baseball bats. Each bat requires 1 kg of aluminum at $18 per kg and 0.25 direct labor hours at $20 per hour. O

verhead is assigned at the rate of $40 per direct labor hour. Assume the actual cost to manufacture one metal bat was $40. Compute the cost variance and classify it as favorable or unfavorable?
Business
1 answer:
aalyn [17]3 years ago
5 0

Answer:

Cost variance= 7 unfavorable

Explanation:

Giving the following information:

Each bat requires 1 kg of aluminum at $18 per kg and 0.25 direct labor hours at $20 per hour. Overhead is assigned at the rate of $40 per direct labor hour. Assume the actual cost to manufacture one metal bat was $40.

Estimated cost= 18 + 0.25*20 + 0.25*40= 33

Actual cost= 40

Cost variance= 7 unfavorable

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Explanation:

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