CenterWare 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 resulis.) 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. Now compute the direct labor efficiency variance. First determine the formula for the efficiency variance, then compute the efficiency variance for direct labor. 12 pounds per pot at a cost of $3.00 per Direct materials (resin) pound Direct labor. .4 .0 hours at a cost of $11.00 per hour Standard variable manufacturing overhead rate ..$5.00 per direct labor hour Budgeted fixed manufacturing overhead .......... $44,600 Standard fixed MOH rate..................... $6.00 per direct labor hour (DLH) 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 1,900 flower pots: 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. CenterWare 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 resulis.) 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. Now compute the direct labor efficiency variance. First determine the formula for the efficiency variance, then compute the efficiency variance for direct labor. 12 pounds per pot at a cost of $3.00 per Direct materials (resin) pound Direct labor. .4 .0 hours at a cost of $11.00 per hour Standard variable manufacturing overhead rate ..$5.00 per direct labor hour Budgeted fixed manufacturing overhead .......... $44,600 Standard fixed MOH rate..................... $6.00 per direct labor hour (DLH) 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 1,900 flower pots: 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
