1. Calculate the standard cost of one awning. 2. Calculate the following variances: a. The direct material variances b. The direct labor variances. c. The variable manufacturing overhead variances. d. The fixed manufacturing overhead variances 3. Explain what each of the variances you calculated means and give at least one possible explanation for each of those variances. Are any of the variances likely to be interrelated? Pender Awning manufactures awnings and uses a standard cost system. The company allocates overhead based on the number of direct labor hours. The following are the company's cost and standards data Actual cost and operating data from the most recent mo (Click the icon to view the standards.) Click the icon to view the actual results) All manufacturing overhead is allocated on the basis of Read the wicemen Requirement 3. Explain what each of the variances you calculated means and give at least one possible explanation for each of those variances Direct materials: Variance Meaning Possible explanation DM price the actual price paid for material was less than the standard dational suppliers entered the market DM quantity It took los material than the standard to produce the 1.900 awnings purchasing higher quality materials Direct Labor Possible explanation Variance Meaning provedency of employees DL rate the actual laborate paid for was more than the standard Med more qualified employees OM officiency took less tabor hours than the standard to produce 1900 awnings Variable manufacturing overhead: Possible explanation Variance Meaning VOH rate VOH officiency Fixed manufacturing overhead: any number in the inputs and then conextusbon Read the Requirement 1. Calculate the standard cost of one awning. Standard cost Standard cost per unit Direct materials 345 Direct labor 52 Variable MOH 16 Fixed MOH 24 437 Total standard cost Requirement 2a. Calculate the direct material variances (Enter the variances as positive numbers Enter currency amounts to the nearest cent and y - Direct materials) First determine the formula for the price variance, then compute the price variance for direct materials. Actual quantity purchased Standard price Actual price DM price variance 45600 x 15 14.5 22800 F Determine the formula for the quantity variance, then compute the quantity variance for direct materials Standard price x Standard quantity allowed Actual quantity used DM quantity variance 15 x 43700 42800 13500 U Requirement 2b. Calculate the direct labor variances (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your Actual hours x Standard rate Actual rate 7470 DL rate variance 3735 U 13 13.5 First determine the formula for the efficiency variance, then compute the efficiency variance for direct labor Standard rate x Standard hours allowed Actual hours DL efficiency variance 13 X 7600 7470 1690 U Requirement 2c. Calculate the variable manufacturing overhead variances. (Enter the variances as positive numbers. Enter currency amounts to First determine the formula for the rate variance, then compute the rate variance for variable manufacturing overhead (Round interim calculation Variable overhead Actual hours Standard rate Actual rate rate variance 7470 42 1494 U Now compute the variable manufacturing overhead efficiency variance. First determine the formula for the efficiency variance, then compute the Variable overhead Standard rate Standard hours allowed Actual hours efficiency variance x 7600 7470 520 U X 4 4 Requirement 2d. Calculate the fived manufacturing overhead variances (Enter the variance as a positive number. Labal the varianca se fan Begin by computing the fixed manufacturing overhead budget variance. First determine the formula for the budget variance, then compute the budget varian Fixed MOH Budgeted fixed overhead Actual fixed overhead budget variance 43400 47400 4000U Now compute the fixed manufacturing overhead volume variance. First determine the formula for the volume variance, then compute the volume variance fo Fixed MOH Std. foxed overhead cost allocated to production Budgeted fixed overhead = volume variance 45600 43400 2200|| U 1. Calculate the standard cost of one awning. 2. Calculate the following variances: a. The direct material variances b. The direct labor variances. c. The variable manufacturing overhead variances. d. The fixed manufacturing overhead variances 3. Explain what each of the variances you calculated means and give at least one possible explanation for each of those variances. Are any of the variances likely to be interrelated? Pender Awning manufactures awnings and uses a standard cost system. The company allocates overhead based on the number of direct labor hours. The following are the company's cost and standards data Actual cost and operating data from the most recent mo (Click the icon to view the standards.) Click the icon to view the actual results) All manufacturing overhead is allocated on the basis of Read the wicemen Requirement 3. Explain what each of the variances you calculated means and give at least one possible explanation for each of those variances Direct materials: Variance Meaning Possible explanation DM price the actual price paid for material was less than the standard dational suppliers entered the market DM quantity It took los material than the standard to produce the 1.900 awnings purchasing higher quality materials Direct Labor Possible explanation Variance Meaning provedency of employees DL rate the actual laborate paid for was more than the standard Med more qualified employees OM officiency took less tabor hours than the standard to produce 1900 awnings Variable manufacturing overhead: Possible explanation Variance Meaning VOH rate VOH officiency Fixed manufacturing overhead: any number in the inputs and then conextusbon Read the Requirement 1. Calculate the standard cost of one awning. Standard cost Standard cost per unit Direct materials 345 Direct labor 52 Variable MOH 16 Fixed MOH 24 437 Total standard cost Requirement 2a. Calculate the direct material variances (Enter the variances as positive numbers Enter currency amounts to the nearest cent and y - Direct materials) First determine the formula for the price variance, then compute the price variance for direct materials. Actual quantity purchased Standard price Actual price DM price variance 45600 x 15 14.5 22800 F Determine the formula for the quantity variance, then compute the quantity variance for direct materials Standard price x Standard quantity allowed Actual quantity used DM quantity variance 15 x 43700 42800 13500 U Requirement 2b. Calculate the direct labor variances (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your Actual hours x Standard rate Actual rate 7470 DL rate variance 3735 U 13 13.5 First determine the formula for the efficiency variance, then compute the efficiency variance for direct labor Standard rate x Standard hours allowed Actual hours DL efficiency variance 13 X 7600 7470 1690 U Requirement 2c. Calculate the variable manufacturing overhead variances. (Enter the variances as positive numbers. Enter currency amounts to First determine the formula for the rate variance, then compute the rate variance for variable manufacturing overhead (Round interim calculation Variable overhead Actual hours Standard rate Actual rate rate variance 7470 42 1494 U Now compute the variable manufacturing overhead efficiency variance. First determine the formula for the efficiency variance, then compute the Variable overhead Standard rate Standard hours allowed Actual hours efficiency variance x 7600 7470 520 U X 4 4 Requirement 2d. Calculate the fived manufacturing overhead variances (Enter the variance as a positive number. Labal the varianca se fan Begin by computing the fixed manufacturing overhead budget variance. First determine the formula for the budget variance, then compute the budget varian Fixed MOH Budgeted fixed overhead Actual fixed overhead budget variance 43400 47400 4000U Now compute the fixed manufacturing overhead volume variance. First determine the formula for the volume variance, then compute the volume variance fo Fixed MOH Std. foxed overhead cost allocated to production Budgeted fixed overhead = volume variance 45600 43400 2200|| U