| Blomdahl Corporation makes a product with the following standard costs: |
| Inputs | Standard Quantity or Hours | Standard Price or Rate | ||||
| Direct materials | 5.2 | kilos | $ | 6.00 | per kilo | |
| Direct labor | 0.3 | hours | $ | 22.00 | per hour | |
| Variable overhead | 0.3 | hours | $ | 2.00 | per hour | |
| | ||||||
| The company reported the following results concerning this product in October. |
| Actual output | 8,100 | units | |
| Raw materials used in production | 43,130 | kilos | |
| Actual direct labor hours | 2,570 | hours | |
| Purchases of raw materials | 46,700 | kilos | |
| Actual price of raw materials | $ | 5.70 | per kilo |
| Actual direct labor rate | $ | 23.70 | per hour |
| Actual variable overhead rate | $ | 1.80 | per hour |
| | |||
| The materials price variance is recognized when materials are purchased. Variable overhead is applied on the basis of direct labor hours.
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