Earthern Ware is a manufacturer of large flower pots for urban settings. The company has these standards: 10 (Click the icon to view the standards.) 11 (Click the icon to view the actual results.) Read the requirements 12. Requirement 1. Compute the direct labor rate variance and the direct labor efficiency variance. (Enter the variances as positive numbers. Enter the currency amounts in the formulas to the nearest cent, then round the final variance amounts to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U). Abbreviations used: DL = Direct labor) Begin with the direct labor rate variance. First determine the formula for the rate variance, then compute the rate variance for direct labor. Now compute the direct labor efficiency variance. First determine the formula for the efficiency variance, then compute the efficiency variance for direct labor. Requirement 2. What is the total variance for direct labor? (Enter the amount as a positive number. Label the variance as favorable ( F ) or unfavorable (U).) The total variance for direct labor is Requirement 3. Who is generally responsible for each variance? The (10) department is responsible for the labor rate variance. The (11) department is responsible for the labor efficiency variance. Requirement 4. Interpret the variances. The (12) labor rate variance means that Grand Ceramics' employees earned (13) per hour than budgeted. The (14) labor efficiency variance means that it actually took (15) direct labor hours than it should have to produce 1,000 pots. 10: Standard Price and Volume 12: Requirements 1. Compute the direct labor rate variance and the direct labor efficiency variance. 2. What is the total variance for direct labor? 3. Who is generally responsible for each variance? 4. Interpret the variances. (1) Standard hours allowed (2) Standard hours allowed Actual hours Standard rate Actual hours Standard rate Actual quantity purchased Actual quantity purchased Actual rate Actual rate (3) Standard hours allowed (4) Actual hours Actual quantity purchased Standard rate F Actual rate (5) Standard hours allowed (6) Standard hours allowed Actual hours Standard rate Actual hours Standard rate Actual quantity purchased Actual quantity purchased Actual rate Actual rate (7) Standard hours allowed (8) (9) (10) human resources or personnel Actual hours Standard rate Actual quantity purchased Actual rate FUFUsalesproductionpurchasing (11) (12) favorable unfavorable (13) less (14) favorable (15) less production unfavorable more unfavorable purchasing sales
