Headstart manufactures headphone cases. During September 2018, the company produced and sold 105,000 cases and recorded the following cost data (Click the icon to view the cost data) Read the requirements Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor. Begin with the cost variances Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC actual cost; AQ actual quantity: FOH= fixed overhead; SC standard cost, SQ- standard quantity) Direct materials cost variance Direct labor cost variance Direct materials efficiency variance Direct labor efficiency variance Formula (AC-SC) x AQ (AC-SC) x AQ Next compute the efficiency variances Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ= actual quantity; FOH-fixed overhead; SC standard cost, SQ = standard quantity) Formula Variance (AQ-SQ) x SC (AQ-SQ) x SC VOH cost variance VOH efficiency variance FOH cost variance FOH volume variance = Formula (AC-SC) x AQ (AQ-SQ) x SC Variance Requirement 2. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. Now compute the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and efficiency variances, and identify whether each variance is favorable (F) or unfavorable (U) (Abbreviations used: AC = actual cost; AQ= actual quantity, FOH= fixed overhead: SC standard cost; SQ = standard quantity, VOH = variable overhead.) Formula Actual FOH-Budgeted FOH Budgeted FOH-Allocated FOH a U 240 U than "standard" materials. The result was an overall Variance Now compute the fixed overhead cost and volume variances. Select the required formulas, compute the fixed overhead cost and volume variances, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC actual cost; AQ = actual quantity, FOH = fixed overhead; SC standard cost, SQ = standard quantity.) F F Headstart's management knew that using higher quality materials would result in a(n) F F Variance F Requirement 3. Headstart's management used better quality materials during September. Discuss the trade-off between the two direct material variances. They hoped these materials would result in more efficient usage Read the garments Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor Begin with the cost variances Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used AC- actual cost AQ actual quantity, FOH-feed overhead: SC standard cost SQ-standard quantity) Variance Direct m Direct la Next com materials used AC Direct m Direct la Requiren fixed ove Now com variable d (U) (Abb standard VOH co VOH eff Now com overhead (Abbrev standard Data Table Standard Cost Information Direct Materials Direct Labor Variable Manufacturing Overhead Actual Cost Information Direct Materials Direct Labor Variable Manufacturing Overhead Fixed Manufacturing Overhead favorable direct material cost variance favorable direct material efficiency variance unfavorable direct material cost variance unfavorable direct material efficiency variance Formula than "standard materials. The result was an overall Quantity Fixed Manufacturing Overhead ($30,400 for static budget volume of 95,000 units and 1.900 hours, or $16 per hour) 2 parts $ Print 0.02 hours 0.02 hours (207,000 parts@ $ (1,600 hours @ Done Cost 0.17 per part 7.00 per hour 9.00 per hour geted FOH located FOH 0.22 per part) $ 7.15 per hour) - X $ 45,540 11,440 11,000 25,000 ty) d the able O= juality materials during September. Discuss the trade-off materials would result in a(n) They hoped these materials would result in more efficient usage