Refer to the Country Designs data set.
Country Designs is a manufacturer of large flower pots for urban settings. The company has these standards:

Country Designs allocated fixed manufacturing overhead to production based on standard direct labor hours. Last month, the company reported the following actual results for the production of 1,300 flower pots:

Requirements
1. Compute the variable manufacturing overhead variances. What do each of these variances tell management?
2. Compute the fixed manufacturing overhead variances. What do each of these variances tell management?

Transcribed Image Text:

Direct materials (resin) 13 pounds per pot at a cost of $4.00 per pound 4.0 hours at a cost of $17.00 per hour Direct labor . Standard variable manufacturing overhead rate Budgeted fixed manufacturing overhead. Standard fixed MOH rate. cost $7.00 per direct labor hour $50,000 $10.00 per direct labor hour (DLH) Purchased 18,510 pounds at a cost of $4.50 per pound; used 17,810 pounds to produce 1,300 pots Worked 4.5 hours per flower pot (5,850 total DLH) at a cost of $16.00 per hour $7.20 per direct labor hour for total actual variable manufacturing overhead of Direct materials Direct labor Actual variable manufacturing overhead $42,120 $49,500 Actual fixed manufacturing overhead Standard fixed manufacturing overhead allocated based on actual production $52,000