Earthern Ware is a manufacturer of large flower pots for urban settings. The company has these standards: (Click the icon to view the standards.) (Click the icon to view the actual results.) Requirements 1. Compute the direct material price variance and the direct material quantity variance. 2. Who is generally responsible for each variance? 3. Interpret the variances. Requirement 1. Compute the direct material price variance and the direct material quantity variance. (Enter the variances as positive numbers. Enter currency amounts in the formula to the nearest cent and then round the final variance amount to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U). Abbreviations used: DM = Direct materials) First determine the formula for the price variance, then compute the price variance for direct materials. x( = DM price variance x( = i Actual Results Earthern Ware allocated fixed manufacturing overhead to production based on standard direct labor hours. Last month, the company reported the following actual results for the production of 1,200 flower pots: Direct materials Purchased 17,740 pounds at a cost of $3.40 per pound; used 17,040 pounds to produce 1,200 pots Direct labor Worked 2.5 hours per flower pot (3,000 Actual variable manufacturing overhead. total DLH) at a cost of $20.00 per hour $3.30 per direct labor hour for total actual variable manufacturing overhead of $9,900 $17,700 Actual fixed manufacturing overhead Standard fixed manufacturing overhead allocated based on actual production $19,200 Print Done i Standards Direct materials (resin) 14 pounds per pot at a cost of $3.00 per pound Direct labor 2.0 hours at a cost of $23.00 per hour Standard variable manufacturing overhead rate $3.00 per direct labor hour Budgeted fixed manufacturing overhead $18,200 Standard fixed MOH rate $8.00 per direct labor hour (DLH) Print Done