Draper, Inc. is a privately held fumiture manufacturer For August, Draper had the following standards for one of its products, a wicker chair Click the icon to view the standards per The following data were compiled regarding actual performance actual output units (chairs) produced, 2.100 square metres of input purchased and used 5,900 price per square metre, $6.00 direct manufacturing labour costs $10.791 actual hours of input, 990, labour price per hour $10.0 Required Requirement 1. Show computations of price and efficiency variances for direct materials and direct manufacturing labour. Give a plausible explanation of why each variance occurred Let's begin by determining the formula used to calculate the actual costs of direct materials, and then enter the amounts in the tools and calculate the cost, found unit costs to the cent Hound the actual cost to the nearest whore Actual co Direct materia Next, we will calculate the actual input at the budgeted price. (Round the budgeted price to the nearest cant Round the cost to the wh Direct Deect manufacturing labour Actualit Determine the formula and calculate the costs for the budget (Round the budgeted price to the nearest cert. Round the budget to the nearest whole dolar) Direct materia Direct manufacturing labour Flexble budget cost Now, compute the price and eficiency variances for drect materials and direct manufacturing labour Label each variance as favourable (F) or unfavourable (U) Direct materials Drect manufacturing labour Price Efficiency Now, give a plausible explanation of why each variance occured. Begin with the direct material valances Draper, Inc. is a privately held furniture manufacturer. For August, Draper had the following standards for one of its products, a wicker chair theloon to view the standards per chair) The following data were compiled regarding actual performance actual output units (chairs) produced, 2,100 square metres of input purchased and used. 5.000 price per square metre 50.00; direct manufacturing labour costs $10,791 actual hours of input, 900 labour price per hour $10.00 Required Direct manufacturing labour Now, give a plausible explanation of why each variance occurred. Begin with the direct material variances The materials price variance The materia eficiency variance The labour price variance The labour efficiency variance There was an unexpected in materials price per square mere due to competition The production manager may have employed workers or the budgeted materials standards were set too efficient workers can be employed, or quality materials can be used Requirement 2. Suppose 8,300 square metres of materials were purchased (at $6.00 per square metre), even though only 5,900 square metres were used. Suppose further that variances are identified at their most timely control point accordingly, direct materiale price variances are isolated and traced at the Sme of purchase to the purchasing department rather than to the production department Compute the price and efficiency variances under this approach Begin with recalculating the costs using the information provided for the atemative ach Actual inpu Standards per chair Actual cost Budgeted price Purchasing Standards per Chair per square Direct Directing Now, compute the direct materials price and efficiency variances Label each variance as favourable (F) or unfavourable (U). labour 0.5 hour of input at 10.00 per hour Price variance emciency variance Print Done