Assignment: Chapter 11 Homework 10. Center Ware is a manufacturer of large flower pots for urban settings. The company has these standards (Click the icon to view the standards.) (Click the icon to view the 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) or 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 || (4) Now compute the direct labor efficiency variance. First determine the formula for the efficiency variance, then compute the efficiency variance for direct labor. (5) = DL efficiency variance (8) 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 laboris Requirement 3. Who is generally responsible for each variance? department is responsible The (10) department is responsible for the labor rate variance. The (11) for the labor efficiency variance Requirement 4. Interpret the variances. - labor rate variance means that Ceramics Etc.'s employees earned (13) - per hour than The (12) budgeted. direct labor hours than it should The (14) - labor efficiency variance means that it actually took (15) have to produce 2.000 pots. 1: Standard Price and Volume Direct materials (resin) ...................... 11 pounds per pot at a cost of $6.00 per pound Direct labor ...................................3.0 hours at a cost of $19.00 per hour Standard variable manufacturing overhead rate ........ S8.00 per direct labor hour Budgeted fixed manufacturing overhead ...... S28,000 Standard fixed MOH rate S5.00 per direct labor hour (DLH) 2: Actual Results CenterWare 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 2,000 flower pots: Direct materials ... . Purchased 23,600 pounds at a cost of $6.20 per pound; Used 23.000 pounds to produce 2,000 pots Direct labor. ... . Worked 3.3 hours per flower pot (6,600 total DLH) at a cost of $18.00 per hour Actual variable manufacturing overhead .... $8.20 per direct labor hour for total actual variable manufacturing overhead of $54,120 Actual fixed manufacturing overhead ...... $27,400 Standard fixed manufacturing overhead allocated based on actual production ...... $30,000 3: Requirements 1. Compute the direct labor rate variance and the direct labor efficiency variance 2. What is the total variance for direct labor? 3. Who is generally responsible for each variance? 4. Interpret the variances (1) O Standard hours allowed O Standard rate Actual hours Actual quantity purchased Actual rate (2) O Standard hours allowed O Standard rate O Actual hours Actual quantity purchased Actual rate (4) O Standard hours allowed Standard rate O Actual hours Actual quantity purchased Actual rate Standard hours allowed O Standard rate (5) O O Actual hours Actual quantity purchased Actual rate O Standard hours allowed O Standard rate (6) O O Actual hours Actual quantity purchased Actual rate (7) O Standard hours allowed Standard rate Standlare have (8) O OF (9) O OF Actual hours Actual quantity purchased Actual rate ou t (12) O fav (10) human resources or personnel O production O purchasing Osales (12) O O O production Toes or personnel (11) O human resources or personnel O production O purchasing Osales favorable unfavorable (13) O less O more (14) O favorable O unfavorable (15) O less O more