Review of Chapters 15 and 16, 3-variance analysis. (CPA, adapted)

(30-50 minutes) Madetoja Oy’s job-costing system has two direct-cost categories—direct materials and direct manufacturing labour. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing labour-hours (DLH). At the beginning of 2000, Madetoja adopted the following standards for its manufacturing costs:

REQUIRED 1. Prepare a schedule of total standard manufacturing costs for the 7,800 output units in January 2000.
2. For the month of January 2000, calculate the following variances, indicating whether each is favourable (F) or unfavourable (U):
Direct materials price variance, based on purchases Direct materials efficiency variance Direct manufacturing labour price variance Direct manufacturing labour efficiency variance Total manufacturing overhead spending variance Variable manufacturing overhead efficiency variance ean os wpme Production-volume variance. nju6

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Direct materials Direct manufacturing labour Manufacturing overhead: Variable Fixed Standard manufacturing cost per output unit INPUT 3 kg at EUR 5.00 per kg 5 hours at EUR 15.00 per hour EUR 6.00 per DLH EUR 8.00 per DLH COST PER OUTPUT UNIT EUR 15.00 75.00 30.00 40.00 EUR 160.00 The denominator level for total manufacturing overhead per month in 2000 is 40,000 direct manufacturing labour-hours. Madetoja's flexible budget for January 2000 was based on this denominator level. The records for January indicate the following: Direct materials purchased Direct materials used Direct manufacturing labour Total actual manufacturing overhead (variable and fixed) Actual production 25,000 kg at EUR 5.20 per kg 23,100 kg 40,100 hours at EUR 14.60 per hour EUR 600,000 7,800 output units