Cole Recliners manufactures leather recliners and uses flexible budgeting and a standard cost system. Cole allocates overhead based on yards of direct m Kfollowing selected data (Click the icon to view the selected data) Read the requirements Requirement 1. Prepare a flexible budget based on the actual number of recliners sold (Round budget amounts per unit to the nearest cent) Cole Recliners Flexible Budget Budget Amounts per Unit Actual Units (Recliners) 1005 Sales Revenue 504 506520 Variable Manufacturing Costs Direct Materials 534 53067 Direct Labor 107 107535 Vanable Overhead 30 6 30753 Fixed Manufacturing Costs 62730 Fixed Overhead Total Cost of Goods Sold Gross Profit Requirement 2. Compute the cost variance and the efficiency variance for direct materials and for direct labor. For manufacturing overhead, compute the vanable overhead cost, varabir overhead efficiens 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 yo answers to the nearest whole dollar Abbreviations used AC actual cost AQ actual quantity, FOH fxed overhead SC standard cost, SO standard quantity Direct materials cost variance Drect labor cost variance Formula (AC-SC) AQ (AC-SC) AQ Vanance 1250 F 2349 U Next compute the efficiency variances Select the required formulas, compute the efficiency vanances for direct materials and direct labor and identity 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 standed quently Direct materials efficiency variance Drect labor othciency vacance Formu (AC-SC) SQ (AC SC) SQ Varance 1970 F Now compute the vanable overhead cost and efficiency variances. Select the required formulas, compule the variable overhead cost and efficency variances, and identity whedhur each variance favorable (F) or unfavorable (U) (Round your answers to the nearest whole dollar Abbreviations unod AC actual cost AQ actual quantity, FOHbxed overhead SC standard cost S0 standard quantity, VOH vanable overhead) 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 s favorable (F) or unfavorable (U) (Round your answers to the nearest whole dollar Abbreviations used AC actual cost AQ achaal quantity, FOH fixed overhead, SC standard cost, 5Q= standard quantity, VOH variable overhead) Formula Vanance VOH cost vanance 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 find overhead, SC standard cost, SQslandand quantity) FOH cost variance Formula Manance FOH volume variance Requirement 3. Have Cole'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 oficiency variance help offset the job controlling materials and tabor costs. The direct labor coul variance and deect materials officiency variance Managers have done e drect matenats cost vanancar and direct labor job controling mverhead costs as evidenced by the lac that of the overhead variances are i Data table Static Budget Actual Results (1.025 recliners) (1.005 recliners) I Sales (1025 recliners x 5505 each) 517625 (1,005 recinors x $400 each) 402 450 Manablo Mandacturing Costs Dired Meterials 6.300 yes 0150 you 55 90/yd)) $8.70/90) 5475 54010 DeLabe 00250 0011070/H) 1005 (850 DUN @5100/00) 365 Vibe Ovenead 150 y 1510/y0) 31.305 300 y 56 50/1 530 Fand Machang Coc 3071 307 tal Gt Goods Sod Oess Frutt B B D M Point Done 1 O P K L 4 . ALT CTPL A 1 16270 1 7 B UINTER (4 - X on 504 Requirements 1. Prepare a flexible budget based on the actual number of recliners sold 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, foxed overhead cost, and fixed overhead volume variances Round to the nearest dollar. 3. Have Cole's managers done a good job or a poor job controlling materials labor, and overhead costs? Why? 4. Describe how Cole's managers can benefit from the standard costing system 534 107 30.0 Search 02750 Print Done o D E P PREY SC BACK ecliners r selecte ck the ic 4 e require Data table Sales (1,025 recliners x $505 each) (1,005 recliners x $490 each) Static Budget (1,025 recliners) Actual Results (1,005 recliners) 517,625 $ 492,450 rement 1. Variable Manufacturing Costs Direct Materials (6,150 yds. @$8.90/yd.) 54,735 (6,300 yds. @$8.70/yd.) 54,810 Direct Labor (10,250 DLHr @ $10.70/DLHr) 109,675 (9,850 DLHr @ $10.90/DLHr) 107,365 Variable Overhead (6,150 yds @ $5.10/yd.) 31,365 ml Units (Re Revenue (6,300 yds Fixed Manufacturing Costs: able Manufa Direct Mater Direct Labor Fixed Overhead Total Cost of Goods Sold Gross Profit Jatiable Ove $6.50/yd.) 40,950 62,730 64,730 258,505 267,855 $ 259,120 $ 224,595 ed Manufact Fixed Overh al Cost of Go Print Done Xrect mi