data: Smartsets manufactures headphone cases. During September 2024, the company produced and sold 107,000 cases and recorded the following cost (Click the icon to view the cost data.) Read the requirements. Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor. 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). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Formula Variance Direct materials cost variance Direct labor cost variance Next compute the efficiency variances. Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Formula Variance Direct materials efficiency variance Direct labor efficiency variance Requirement 2. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. 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 is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity; VOH = variable overhead.) Formula Variance VOH cost variance 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). (Abbreviations used: AC = actual cost; AQ = actual quantity, FOH = fixed overhead: SC = standard cost; SQ = standard quantity.) Formula Variance FOH cost variance FOH volume variance Requirement 3. Smartsets's management used better quality materials during September. Discuss the trade-off between the two direct material variances Smartsets's management knew that using higher quality materials would result in a(n) . They hoped these materials would result in more efficient usage than "standard" materials. The result was an overall - Requirements 1. 2. Compute the cost and efficiency variances for direct materials and direct labor. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. Smartsets's management used better quality materials during September. Discuss the trade-off between the two direct material variances. 3. 4 Print Done Data Table 0.02 hours 0.02 hours Standard Cost Information Quantity Cost Direct Materials 2 parts $0.16 per part Direct Labor 19.00 per hour Variable Manufacturing Overhead 11 per hour Fixed Manufacturing Overhead ($31,040 for static budget volume of 97,000 units and 1,940 hours, or $16 per hour) Actual Cost Information Direct Materials (212,000 parts @ $0.21 per part) Direct Labor (1,640 hours @ $19.15 per hour) Variable Manufacturing Overhead Fixed Manufacturing Overhead $ 44,520 31,406 11,000 31,000
