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FlowerMate is a manufacturer of large flower pots for urban settings. The company has these standards: .: (Click the icon to view the standards.) B
FlowerMate is a manufacturer of large flower pots for urban settings. The company has these standards: .: (Click the icon to view the standards.) B (Click the icon to view the actual results.) Read the requirements. 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. DM price variance Determine the formula for the quantity variance, then compute the quantity variance for direct material. DM quantity variance Requirement 2. Who is generally responsible for each variance? The department is responsible for the materials price variance. The department is responsible for the materials quantity variance. Requirement 3. Interpret the variances. The materials price variance means that the actual price Grand Ceramics' personnel paid for resin the standard budgeted price for resin. The materials quantity variance means that Grand Ceramics' employees used resin than they should have to produce 1,800 pots. Direct materials (resin). Direct labor. ...... Standard variable manufacturing overhead rate Budgeted fixed manufacturing overhead Standard fixed MOH rate..... 16 pounds per pot at a cost of $3.00 per . pound .3.0 hours at a cost of $19.00 per hour ... $6.00 per direct labor hour $35,800 $7.00 per direct labor hour (DLH) FlowerMate 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 1,800 flower pots: Purchased 30,500 pounds at a cost of $3.40 per pound; Direct materials.. ...used 29,700 pounds to produce 1,800 pots Worked 3.2 hours per flower pot (5,760 total DLH) at a Direct labor..... ... cost of $18.00 per hour Actual variable manufacturing $6.30 per direct labor hour for total actual variable overhead. .... manufacturing overhead of $36,288 Actual fixed manufacturing overhead $35,200 Standard fixed manufacturing overhead allocated based on actual production. $37,800
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