Ethan Hopkins is a cost accountant and business analyst for Dandy Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labor. Hopkins feels that manufacturing overhead is most closely related to material usage. Therefore, DDC allocates manufacturing overhead to production based upon pounds of materials used. (Click the icon to view the standards.) (Click the icon to view the actual results for April.) Read the requirements. Requirement 1. For the month of April, compute the variances, indicating whether each is favorable (F) or unfavorable (U). a. Direct materials price variance (based on purchases) is U b. The direct materials efficiency variance is c. The direct manufacturing labor price variance is U d. The direct manufacturing labor efficiency variance is F e. The variable manufacturing overhead spending variance is U f. The variable manufacturing overhead efficiency variance is F U g. The production-volume variance is h. The fixed manufacturing overhead spending variance is Requirement 2. Can Hopkins use any of the variances to help explain any of the other variances? Give examples. The direct materials price variance indicates that DDC paid more for brass than they had planned. If this is because they purchased a higher quality brass, it may explain why they used less brass than expected leading to an) unfavorable material efficiency variance). In turn, since variable manufacturing overhead is assigned based on pounds of materials used, this directly led to the favorable variable overhead efficiency variance. The purchase of this quality of brass may also explain why it took less labor time to produce the doorknobs than expected (the favorable direct labor efficiency variance) Finally, the unfavorable direct labor price variance could imply that the workers who were hired were more experienced than expected, which could also be related to the positive direct material and direct labor efficiency variances. I Data Table At the beginning of 2017, DDC budgeted annual production of 400,000 doorknobs and adopted the following standards for each doorknob: Input Cost/Doorknob Direct materials (brass) 0.3 lb. @ $11/b. $ 3.30 Direct manufacturing labor 1.2 hours @ $19/hour 22.80 Variable manufacturing overhead $6/1b x 0.3 lb. 1.80 4.20 Fixed manufacturing overhead $14/lb. x 0.3 lb. $ 32.10 Standard cost per doorknob Data Table Actual results for April 2017 were as follows: Production 27,000 doorknobs Direct materials purchased 13,000 lb. at $12/1b. Direct materials used 8,000 lbs. Direct manufacturing labor 29,900 hours for $657,800 Variable manufacturing overhead $64,900 Fixed manufacturing overhead $153,000