Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Dwyer, Inc. is a privately held furniture manufacturer. For August 2014, Dwyer had the following standards for one of its products, a wicker chair: Direct

image text in transcribedimage text in transcribedimage text in transcribed

Dwyer, Inc. is a privately held furniture manufacturer. For August 2014, Dwyer had the following standards for one of its products, a wicker chair: Direct materials Standards per Chair 2 square yards of input at $ 5.30 per square yard 0.5 hour of input at $ 10.60 per hour Direct manufacturing labor The following data were compiled regarding actual performance: actual output units (chairs) produced, 2,900; square yards of input purchased and used, 5,400; price per square yard, $5.40; direct manufacturing labor costs, $10,272; actual hours of input, 960; labor price per hour, $10.70. 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 variance occurred. 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 cost Requirements Direct materials Next we will calculate the actual input at the budgeted price. Actual input Budgeted price Cost Direct materials Direct manufacturing labor 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 7,900 square yards of materials were purchased (at $5.40 per square yard), even though only 5,400 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. Determine the formula and calculate the costs for the flexible budget. x = Flexible budget cost Choose from any list or enter any number in the input fields and then continue to the next question. Print Done Dwyer, Inc. is a privately held furniture manufacturer. For August 2014, Dwyer had the following standards for one of its products, a wicker chair: Standards per Chair Direct materials 2 square yards of input at $ 5.30 per square yard 0.5 hour of input at $ 10.60 per hour Direct manufacturing labor The following data were compiled regarding actual performance: actual output units (chairs) produced, 2,900; square yards of input purchased and used, 5,400; price per square yard, $5.40; direct manufacturing labor costs, $10,272; actual hours of input, 960; labor price per hour, $10.70. Read the fequirements Determine the formula and calculate the costs for the flexible budget. = Flexible budget cost Direct materials Direct manufacturing labor Now compute the price and efficiency variances for direct materials and direct manufacturing labor. Label each variance as favorable (F) or unfavorable (U). Price Efficiency variances variances Direct materials Direct manufacturing labor Now give a plausible explanation of why each variance occurred. Begin with the direct material variances. Choose from any list or enter any number in the input fields and then continue to the next question. Dwyer, Inc. is a privately held furniture manufacturer. For August 2014, Dwyer had the following standards for one of its products, a wicker chair: Direct materials Standards per Chair 2 square yards of input at $ 5.30 per square yard 0.5 hour of input at $ 10.60 per hour Direct manufacturing labor The following data were compiled regarding actual performance: actual output units (chairs) produced, 2,900; square yards of input purchased and used, 5,400; price per square yard, $5.40; direct manufacturing labor costs, $10,272; actual hours of input, 960; labor price per hour, $10.70. Read the requirements. Price Eticiency variances variances Direct materials Direct manufacturing labor Now give a plausible explanation of why each variance occurred. Begin with the direct material variances. The materials price variance: There was an unexpected in materials price per square yard due to competition The materials efficiency variance: The production manager may have employed workers or the budgeted materials standards were set too The labor price variance: in labor rates due to a The labor efficiency variance: efficient workers being employed or the use of V quality materials. Choose from any list or enter any number in the input fields and then continue to the next

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Global Financial Accounting And Reporting Principles And Analysis

Authors: Peter J. Walton, Walter Aerts

3rd Edition

1408062860, 9781408062869

More Books

Students also viewed these Accounting questions

Question

Compare and contrast verbal and nonverbal codes

Answered: 1 week ago

Question

Define and discuss the nature of ethnocentrism and racism

Answered: 1 week ago

Question

Define and discuss racial and ethnic stereotypes across cultures

Answered: 1 week ago