Question

Required information Use the following information for the Quick Study below. [The following information applies to the questions displayed below.] BatCo makes metal baseball bats. Each bat requires 2.00 kg of aluminum at $16 per kg and 0.30 direct labor hours at $22 per hour. Overhead is assigned at the rate of $32 per direct labor hour. QS 23-6 Cost variances LO C2 Assume the actual cost to manufacture one metal bat is $54.20. Compute the cost variance and classify it as favorable or unfavorable.

Answer 1

Standard cost for one unit metal baseball bats

	Qty per unit (A)	cost per unit (B)	Standard cost (A × B)
Direct materials	2kg	16	32
Direct labor	0.30	22	6.6
Overhead	0.30	32	9.6
Total standard cost			48.2

Standard cost =$ 48.2 and actual cost =$ 54.2

Cost variance = actual cost - standard cost = 54.2 - 48.2= 6

$6 is unfavorable because actual cost is More than estimated cost ( standard cost)