1. Gina in the King's Road Inc., makes naugahyde couches. The company to make the furniture, wood and leather. The company's standard costs are as follows (wood in boards and leather in pounds, variable/fixed over machine hours). Overhead costs are allocated to production based on couches. The company uses two main materials he company's standard costs for materials and labor pounds, variable/fixed overhead based on cated to production based on machine hours. Standard Quantity Standard Price Standard Cost or Rate Or Hours $51.30 65.60 6.00 1.50 18.00 Wood 9 boards Leather 8 pounds Direct Labor 0.5 DL hours Variable Manufacturing Overhead 0.3 M hours Fixed Manufacturing Overhead 0.3 M hours (Note: Denominator level of 900 M hours, budgeted production 3000 units, and budgete overhead of $ 54,000.) Total standard cost per unit $ 142.40 $ 5.70 per board $ 8.20 per pound $ 12.00 per DL hour $ 5.00 per M hour $ 60.00 per M hour The months results are as follows: Production and sales 2500 units. Actual fixed overhead costs incurred were $ 60,000, Purchases of wood this month were 18,000 boards for $ 5.80 each, the wood beginning Inventory consisted of 5,000 boards at a total cost of $ 28,500, the month's ending Inventory was 2,500 boards. Purchases of leather this month were 22,600 pounds for $7.95 each, the leather beginning inventory was 2,000 pounds at a total cost of $ 16,400, the month's ending inventory was 1,000 pounds. Finished goods and work in process inventories are insignificant and can be ignored Assembly workers worked 1,550 direct labor hours at a cost of $ 11,40 a DL hour 800 machine hours were used at an average variable overhead cost of $ 5.20 a machine hour. It is the company's policy to close all variances to cost of goods sold on a monthly basis. Compute the company's Material variances for price and efficiency separately each for wood od for leather, the labor price and efficiency variances, and the fixed and variable overhead and efficiency/production volumne variances. Was fixed manufacturing overhead spending and efficiency/production volumne varis over or under allocated? 1. Gina in the King's Road Inc., makes naugahyde couches. The company to make the furniture, wood and leather. The company's standard costs are as follows (wood in boards and leather in pounds, variable/fixed over machine hours). Overhead costs are allocated to production based on couches. The company uses two main materials he company's standard costs for materials and labor pounds, variable/fixed overhead based on cated to production based on machine hours. Standard Quantity Standard Price Standard Cost or Rate Or Hours $51.30 65.60 6.00 1.50 18.00 Wood 9 boards Leather 8 pounds Direct Labor 0.5 DL hours Variable Manufacturing Overhead 0.3 M hours Fixed Manufacturing Overhead 0.3 M hours (Note: Denominator level of 900 M hours, budgeted production 3000 units, and budgete overhead of $ 54,000.) Total standard cost per unit $ 142.40 $ 5.70 per board $ 8.20 per pound $ 12.00 per DL hour $ 5.00 per M hour $ 60.00 per M hour The months results are as follows: Production and sales 2500 units. Actual fixed overhead costs incurred were $ 60,000, Purchases of wood this month were 18,000 boards for $ 5.80 each, the wood beginning Inventory consisted of 5,000 boards at a total cost of $ 28,500, the month's ending Inventory was 2,500 boards. Purchases of leather this month were 22,600 pounds for $7.95 each, the leather beginning inventory was 2,000 pounds at a total cost of $ 16,400, the month's ending inventory was 1,000 pounds. Finished goods and work in process inventories are insignificant and can be ignored Assembly workers worked 1,550 direct labor hours at a cost of $ 11,40 a DL hour 800 machine hours were used at an average variable overhead cost of $ 5.20 a machine hour. It is the company's policy to close all variances to cost of goods sold on a monthly basis. Compute the company's Material variances for price and efficiency separately each for wood od for leather, the labor price and efficiency variances, and the fixed and variable overhead and efficiency/production volumne variances. Was fixed manufacturing overhead spending and efficiency/production volumne varis over or under allocated