Unformatted text preview: costs (unchanged from original budget). For Bases, Inc., production was 13,300 units and variable costs were $0.72 per direct labor hour. As each unit takes .5 direct labor hours to make, the variable overhead is 13,300 units times .5 hours times $0.72, or $4,788. When added to fixed costs of $3,625, the total budgeted overhead costs are $8,413 for the month. Possible reasons for the unfavorable variance are: indirect materials were purchased from a different supplier with higher costs, or more indirect materials were used due to waste; indirect labor rates were higher due to a change in personnel or higher negotiated raises than budgeted; and/or fixed overhead costs were more than budgeted....
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- Spring '09
- $232, $0.72, $3,625, unfavorable controllable variance, $4,788, $9,130