budgeting and a standard cost system. McKnight allocates overhead Mcknight Recliners manufactures leather recliners and uses based on yards of direct materials. The company's perform (Click the icon to view the selected data) wing selected data: Read the requirements (Round budget amounts per unit to the nearest Requirement 1. Prepare a flexible budget based on the actual numbe cont.) McKnight Recliners Flexible Budget Budget Amounts per Unit Actual Units (Recliners) Sales Revenue Variable Manufacturing Costs: Direct Materials Direct Labor Variable Overhead Fred Manufacturing Costs: Foxed Overhead Total Cost of Goods Sold Gross Pront Requirement 2. Compute the cost variance and the efficiency variance for direct materials and for direct labor For manufacturing overhead, compute the variable overhead cost, variable overhead efficiency, fixed overhead cost, and fixed overhead volume variances Choose from any list or enter any number in the input folds and then continue to the next question . Knigh Data Table (Clio ead the Static Budget (975 recliners) 482,625 Actual Results (955 recliners) Jare equire ent.) Sales $ (975 recliners x $ 495 each) (955 recliners x $ 480 each) 458,400 Variable Manufacturing Costs: Direct Materials 50,310 50,291 Direct Labor 90,675 (5,850 yds @ $ 8.60 / yd.) (5,987 yds @ $ 8.40 / yd.) (9,750 DLH @ $ 9.30 / DLH) (9,350 DLH @ $ 9.50 / DLH) (5,850 yds @ $ 5.30 / yd.) (5,987 yds @ $ 6.70 / yd.) ctual u 88,825 Variable Overhead 31,005 40,113 ales R ariable Dire Dired Varia Ked M Fixed tal co Fixed Manufacturing Costs: Fixed Overhead Total Cost of Goods Sold 60,255 232,245 250,380 $ 62,255 241,484 216,916 Gross Profit Print Print Dono oss PI Requirement 2. Compute the cost variance and the efficiency variance for direct materials and for direct labor. For manufacturing overhead, compute the variable overhead cost, variable overhead efficiency, fixed overhead cost and fixed overhead volume variances Round to the nearest dollar 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). (Round your answers to the nearest whole dollar. Abbreviations used: AC- actual cost; AQ = actual quantity; FOH = fixed overhead, SC - standard cost; SO - standard quantity) Formula Variance Direct materials cost variance Direct labor cost variance 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). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost: AQ - actual quantity: FOH = fixed overhead; SC - standard cost: SQ = standard quantity) Formula Variance Direct materials efficiency variance Direct labor efficiency variance 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), (Round your answers to the nearest whole dollar. Abbreviations used: AC actual cost; AQ - actual quantity: FOH = fixed overhead, SC - standard cost; SQ - standard quantity: VOH variable overhead.) Formula Variance VOH cost variance Choose from any list or enter any number in the input fields and then continue to the next question Read the requirements - 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). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost: AQ = actual quantity: FOH = fixed overhead: SC = standard cost; SQ = standard quantity: VOH - vanable overhead.) Formula Variance VOH cost variance VOH efficiency 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). (Round your answers to the nearest whole dollar Abbreviations used: AC = actual cost: AQ - actual quantity: FOH = fixed overhead; SC - standard cost; SO standard quantity) Formula Variance FOH cost variance FOH volume variance Requirement 3. Have Mcknight's managers done a good job or a poor job controlling materials, labor, and overhead costs? Why? The variances computed in Requirement 2 suggest that the managers have done a job controlling materials and labor costs The direct materials cost variance and direct labor efficiency variance help offset the direct labor cost variance and direct materials efficiency variance Managers have done a job controlling overhead costs as evidenced by the fact that of the overhead variances are Requirement 4. Describe how McKnight's managers can benefit from the standard costing system Standard costina halos managers do the following: Choose from any list or enter any number in the input fields and then continue to the next question - 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). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost: AQ - actual quantity, FOH = fixed overhead: SC standard cost: S - standard quantity) Variance FOH cost variance - FOH volume variance Requirement 3. Have Mcknight's managers done a good job or a poor job controlling materials, labor, and overhead costs? Why? The variances computed in Requirement uggest that the managers have done a job controlling materials and labor costs. The direct materials co and direct labor efficiency variance help offset the direct labor cost variance and direct materials officiency variance. Managers have done a job controlling overhead costs as evidenced by the fact that of the overhead variances are U can benefit from the standard costing system 2 Requirement Standard costing helps mana 8 EL Choose from any list or enter any number in the input fields and then continue to the next