Case Study Question

Don Johnson is the management accountant for Cari-Blocks (CB), which manufactures specialty blocks. CB uses two direct cost categories: direct materials and direct manufacturing labour. Johnson feels that manufacturing overhead is most closely related to material usage. Therefore, CB allocates manufacturing overhead to production based upon pounds of materials used.

At the beginning of 2021, CB budgeted annual production of 200,000 blocks and adopted the following standards for each block:

Input Cost/Block

Direct materials	0.5 lb. @ $12/lb.	$ 6.00
Direct manufacturing labour	1.4 hours @ $20/hour	28.00
Manufacturing overhead:
Variable	$6/lb. 0.5 lb.	3.00
Fixed	$15/lb. 0.3 lb.	4.50
Standard cost per block		$41.50

Actual results for April 2021 were as follows:

Production	24,000blocks
Directmaterials purchased	12,000 lb. at$13/lb.
Directmaterials used	11,450lb.
Directmanufacturinglabour	38,000 hours for$798,000
Variablemanufacturingoverhead	$68,150
Fixedmanufacturingoverhead	$155,000

Requirements:

1. Prepare the schedule of total standard manufacturing costs for the 24,000 productions of blocks in April 2021. (5Marks)
2. For the month of April, compute the following variances, indicating whether each is favourable (F) or unfavourable(U):

a. Direct materials price variance (based on purchases). (5Marks)

b. Direct materials efficiency variance. (5Marks)

c. Direct manufacturing labour price variance. (5Marks)

d. Direct manufacturing labour efficiency variance. (5Marks)

e. Variable manufacturing overhead spending variance. (5Marks)

f. Variable manufacturing overhead efficiency variance. (5Marks)

g. Fixed manufacturing overhead spending variance. (5Marks)

h. Production-volume variance. (5Marks)

Please do the requirements above in an excel file only. You must show ALL supporting workings where necessary and state any assumption(s) made.