1.

For the month of April, compute the following variances, indicating whether each is favorable (F) or unfavorable (U). a. Direct materials price variance (based on purchases) b. Direct materials efficiency variance c. Direct manufacturing labor price variance d. Direct manufacturing labor efficiency variance e. Variable manufacturing overhead spending variance f.Variable manufacturing overhead efficiency variance g. Production-volume variance h. Fixed manufacturing overhead spending variance

2.

Can Dickens use any of the variances to help explain any of the other variances? Give examples.

Nathan Dickens is a cost accountant and business analyst for Dayton Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labor. Dickens feels that manufacturing overhead is most closely related to material usage. Therefore, DDC allocates manufacturing overhead to production based upon pounds of materials used. (Click the icon to view the standards.) (Click the icon to view the actual results for April.) i Data Table X X Data Table brabl Actual results for April 2020 were as follows: Production 33,000 doorknobs 12,600 lb. at $12/1b. At the beginning of 2020, DDC budgeted annual production of 430,000 doorknobs and adopted the following standards for each doorknob: Input Cost/Doorknob Direct materials (brass) 0.3 lb. at $10/1b. $ 3.00 Direct manufacturing labor 1.2 hours at $15/hour 18.00 Variable manufacturing overhead $6/lb 0.3 lb. 1.80 4.20 Fixed manufacturing overhead $14/1b. x 0.3 lb. $ 27.00 Standard cost per doorknob 7,500 lbs. Direct materials purchased Direct materials used Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead 28,900 hours for $635,800 $64,800 $160,000