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Ceramics Etc. is a manufacturer of large flower pots for urban settings. The company has these standards: (Click the icon to view the standards.) (Click
Ceramics Etc. 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. unfavorable (U). Abbreviations used: DM = Direct materials) First determine the formula for the price variance, then compute the price variance for direct materials. (()=DMpricevariance=1 Requirements 1. Compute the direct material price variance and the direct material quantity variance. 2. Who is generally responsible for each variance? 3. Interpret the variances. Actual Results Standards Ceramics Etc. 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 (resin) 11 pounds per pot at a cost of $4.00 per Direct labor .0 hours at a cost of $21.00 per hour Standard variable manufacturing overhead rate $8.00 per direct labor hour Budgeted fixed manufacturing overhead . . . . $127,000 Standard fixed MOH rate $13.00 per direct labor hour (DLH) overhead allocated based on actual production $130,000
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