Data Table Static Budget Actual Results (975 recliners) (955 recliners) Sales $ 502, 125 (975 recliners x $ 515 each) (955 recliners x $ 495 each) $ 472,725 Variable Manufacturing Costs: Direct Materials 49,725 49,692 Direct Labor 88,725 (5,850 yds. @ $ 8.50 / yd.) (5,987 yds. @ $ 8.30 / yd.) (9,750 DLHr @ $ 9.10 / DLHr) (9,350 DLHr @ $ 9.30 / DLHr) (5,850 yds. @ $ 5.30 / yd.) (5,987 yds. @ $ 6.70 / yd.) 86,955 Variable Overhead 31,005 40,113 Fixed Manufacturing Costs: Fixed Overhead 60,255 62,255 Total Cost of Goods Sold 229,710 239,015 $ 272,415 $ 233,710 Gross Profit Print Done Done White Recliners Flexible Budget Budget Amounts per Unit Actual Units (Recliners) Sales Revenue Variable Manufacturing Costs: Direct Materials Direct Labor Variable Overhead Fixed Manufacturing Costs: 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 variable overhead cost, variable overhead efficiency, 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 your answers to the nearest whole dollar. 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 11 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). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Formula Variance II = Direct materials efficiency variance Direct labor efficiency variance 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). (Round your answers to the nearest whole dollar. 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). (Round your answers to the nearest whole dollar. 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. Have White'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 job controlling materials and labor costs. The direct materials cost variance and direct labor efficiency variance help offset the direct labor cost variance and direct materials efficiency variance. Managers have done a job controlling overhead costs as evidenced by the fact that of the overhead variances are Requirement 4. Describe how White's managers can benefit from the standard costing system. Standard costing helps managers do the following: Data Table Static Budget Actual Results (975 recliners) (955 recliners) Sales $ 502, 125 (975 recliners x $ 515 each) (955 recliners x $ 495 each) $ 472,725 Variable Manufacturing Costs: Direct Materials 49,725 49,692 Direct Labor 88,725 (5,850 yds. @ $ 8.50 / yd.) (5,987 yds. @ $ 8.30 / yd.) (9,750 DLHr @ $ 9.10 / DLHr) (9,350 DLHr @ $ 9.30 / DLHr) (5,850 yds. @ $ 5.30 / yd.) (5,987 yds. @ $ 6.70 / yd.) 86,955 Variable Overhead 31,005 40,113 Fixed Manufacturing Costs: Fixed Overhead 60,255 62,255 Total Cost of Goods Sold 229,710 239,015 $ 272,415 $ 233,710 Gross Profit Print Done Done White Recliners Flexible Budget Budget Amounts per Unit Actual Units (Recliners) Sales Revenue Variable Manufacturing Costs: Direct Materials Direct Labor Variable Overhead Fixed Manufacturing Costs: 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 variable overhead cost, variable overhead efficiency, 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 your answers to the nearest whole dollar. 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 11 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). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Formula Variance II = Direct materials efficiency variance Direct labor efficiency variance 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). (Round your answers to the nearest whole dollar. 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). (Round your answers to the nearest whole dollar. 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. Have White'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 job controlling materials and labor costs. The direct materials cost variance and direct labor efficiency variance help offset the direct labor cost variance and direct materials efficiency variance. Managers have done a job controlling overhead costs as evidenced by the fact that of the overhead variances are Requirement 4. Describe how White's managers can benefit from the standard costing system. Standard costing helps managers do the following