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Actual Results 1 Elegance allocated fixed manufacturing overhead to production based on standard direct labor hours. Last month, the company reported the following actual results
Actual Results 1 Elegance allocated fixed manufacturing overhead to production based on standard direct labor hours. Last month, the company reported the following actual results for the production of 1,300 flower pots: Direct materials Purchased 11,260 pounds at a cost of $4.50 per pound; Used 10,660 pounds to produce 1,300 pots Worked 2.4 hours per flower pot (3,120 Direct labor total DLH) at a cost of $12.00 per hour $6.50 per direct labor hour for total Actual variable manufacturing overhead actual variable manufacturing overhead of $20,280 $22,000 Actual fixed manufacturing overhead Standard fixed manufacturing overhead allocated based on actual production $23,400 Print Done Standard Price and Volume Direct materials (resin) 8 pounds per pot at a cost of $4.00 per pound 2.0 hours at a cost of $13.00 per hour Direct labor Standard variable manufacturing $6.00 per direct labor hour overhead rate $22,400 Budgeted fixed manufacturing overhead $9.00 per direct labor hour (DLH) Standard fixed MOH rate Print Done Elegance is a manufacturer of large flower pots for urban settings. The company has these standards: EClick the icon to view the standards) (Clic the icon view th actual results.) Read the requirements. Requirement 1. Compute the direct labor rate variance and the direct labor efficiency variance. (Enter the variances as positive numbers. Enter the currency amounts in the formulas to the nearest cent, then round the final variance amounts to the nearest whole dollar. Label the variance as favorable (F) unfavorable (U). Abbreviations used: DL Direct labor) Begin with the direct labor rate variance. First determine the formula for the rate variance, then compute the rate variance for direct labor. DL rate variance Now compute the direct labor efficiency variance, First determine the formula for the efficiency variance, then compute the efficiency variance for direct labor. DL efficiency variance Requirement 2. What is the total variance for direct labor? (Enter the amount as a positive number. Label the variance as favorable (F) or unfavorable (U).) The total variance for direct labor is Requirement 2. What is the total variance for direct labor? (Enter the amount as a positive number. Label the variance as favorable (F) or unfavorable (U).) The total variance for direct labor is Requirement 3. Who is generally responsible for each variance? department is responsible for the labor rate variance. The The department is responsible for the labor efficiency variance. Requirement 4. Interpret the variances. per hour than budgeted. The labor rate variance means that Elegance's employees earned labor efficiency variance means that it actually took The direct labor hours than it should have produce 1,300 pots
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