Davidow, Inc. is a privately held furniture manufacturer For August 2017 Davidow had the following standards for one of its products, a wicker chair (Click the icon to view the standards per chair) The following data were compiled regarding actual performance actual output units (chairs) produced, 2,000 square yards of input purchased and used 3,600, labor price per hour, $9.90 Read the requirements Requirement 1. Show computations of price and efficiency variances for direct materials and direct manufacturing labor Give a plausible explanation of why each Let's begin by determining the formula used to calculate the actual costs of direct materials, then enter the amounts in the formula and calculate the cost Actual input Actual price Actual cost Direct materials 3,600 $ 19,440 Next we will calculate the actual input at the budgeted price Actual input 3.600 990 Budgeted price 5.3 Direct materials Direct manufacturing labor Cost 19,080 9,900 Budgeted price Flexible budget cost Determine the formula and calculate the costs for the flexible budget Budgeted input for actual output x Direct materials 6000 Direct manufacturing labor 31800 Choose from any list or enter any number in the input fields and then click Check Answer. Clear All 5 5 parts remaining O Type here to search al output units (chairs) produced, 2,000 square yards of input purchased and used, 3,600; price per square yard, $5.40, direct Requirements for direct mate sts of direct me fed Actual price 5.4 1. Show computations of price and efficiency variances for direct materials and direct manufacturing labor. Give a plausible explanation of why each variance occurred. 2. Suppose 6,000 square yards of materials were purchased (at $5.40 per square yard), even though only 3,600 square yards were used. Suppose further that variances are identified at their most timely control point, accordingly, direct materials price variances are isolated and traced at the time of purchase to the purchasing department rather than to the production department. Compute the price and efficiency variances under this approach. Budg Budg Print Done then click Check Answer. Clear All output units (chairs) produced, 2,000, square yards of input purchased and used, 3.600, price per square yard, or direct mat i Requirements X red s of direct me i Data Table Actual price 5.4 Standards per Chair 2 square yards of input at $ 5.30 per square yard 0.5 hour of input at $ 10.00 per hour Direct materials . Direct manufacturing labor Budg Print Done Print Budg Done
