Refer to the GrandScapes data set.

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?

GrandScapes data set.

GrandScapes is a manufacturer of large flower pots for urban settings. The company has these standards:

Direct materials (resin)............................................. 8 pounds per pot at a cost of $ 6.00 per

pound Direct labor............................................................. 2.0 hours at a cost of $ 15.00 per hour tandard variable manufacturing overhead rate..................................................... $ 4.00 per direct

labor hour Budgeted fixed manufacturing overhead............... $ 16,600

Standard fixed MOH rate........................................ $ 8.00 per direct labor hour (DLH)

GrandScapes 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 1,100 flower pots:

Direct materials....................................................... Purchased 9,950 pounds at a cost of $ 6.30 per pound; used 9,350 pounds to produce 1,100 pots

Direct labor............................................................. Worked 2.2 hours per flower pot (2,420 total

DLH) at a cost of $ 14.00 per hour

Actual variable manufacturing overhead................ $ 4.30 per direct labor hour for total actual variable manufacturing overhead of $ 10,406

Actual fixed manufacturing overhead..................... $ 16,400

Standard fixed manufacturing overhead

allocated based on actual production.................... $ 17,600