DATA:

Questions (please answer parts: e,f,g,h, and question #2

Tara Tahari is a cost accountant and business analyst for Doorknob Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labor. Tahari feels that manufacturing overhead is most closely related to direct labor hours. Therefore, DDC allocates manufacturing overhead to production based upon standard direct labor hours. At the beginning of 2022, DDC budgeted annual production of 420,000 doorknobs and adopted the following standards for each doorknob: Actual results for September 2022 were as follows: Some Formulas: MQV=SPSQAQU MPV=AQPSPAP LEV=SRSHAH LRV=AHSRAR VMEV=SRVMOHSHAH VMRV=AHSRVMOHARVMOH pvV=SRFMOHSHSRFMOHBH FMOH spending variance =FMOHMBAHARFMOH Total FMOH Variance =SRFMOHSH Actual FMOH e. Variable manufacturing overhead rate variance (VMRV) f. Variable manufacturing overhead efficiency variance (VMEV) g. Production-volume variance (pvv) h. Fixed manufacturing overhead spending variance (FMOH flexible variance) 2. After performing the variance analysis in September, Tara identifies her top 2 variances that warrant further investigation. Based on your variance analysis in Part 1, which 2 variances would you investigate further and why? For each of these 2 variances, provide 1 potential reason for the observed variances. What corrective actions would you recommend