2. Comprehensive Variance Analysis

Prepare a Level 3 Variance Analysis for DM,DL and VOH

We Produce high-quality brass candlesticks. We purchase a quantity of brass ingots and workers melt, shape, and polish the brass into the finished product.

Budget Information: At the beginning of the year, we planned to produce and sell 1050 candlesticks and sell them at $200/ candlestick. Each candlestick should use 10 pounds of brass @ $5.00/pound and 4.1 DLH @ $18.00/DLH. VOH is allocated based on DLH and is budgeted to be $21,525 for the year. FOH is budgeted to be $10,000 for the year. ( You might want to calculate the budgeted VOH Allocation Rate)

Actual Information: At the end of the year, our actual results were as follows. We produced and sold 1,100 candlesticks and sold them at an average price of $205/candlestick. Each candlestick used 9.4 pounds of brass which cost $5.30/pound and 4.3 DLH which cost $19.00/DLH. Actual VOH was $24,123 and actual FOH $9,800 ( You might want to calculate the actual VOH Allocation Rate)