Formule = Direct materials cast variance Direct labor Dost variance J = = 1090|| U 545 F Next compute the efficiency variades. Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each vananse is favorable (F) ar unfavorable {U}. (Round your answers to the rearest whole dollar. Abbreviations used: AC = actual cost; AQ = actual quantity: FOH - fixed overhead: SC - standard post: SC - standard quantity) Formula Varianca Direct materials efficiency variance = N Direct laboruffie ency variance Now compute the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and efficiency variances, and identify whether each variance is favorable For unfavorable (U). (Round your answers to the nearest whole dollar. Abbreviations used: AC- actual col;AQ - actual quantily, FOH - dovereed: SC - standard doel: SQ - slancard quantity, VOH - variable overhead.) Formula VOH coat variance VDH ciciency variance = New pampute the fixed Overhead cast and valume variarces. Select the recuired formulas, carrpule the fixed Overhead cost and valuire variances, and identify whether each variance is favorable (F) or unfavorable (U). Round your answers to the nearest wnale collar. Abbreviations used: AC = actus cost: AQ - acua quantity, FOH-fixed overhead; SC-standard coet SQ - landard Quality Formula Variance FOH Dost variante = FOH valume variance = Requirement 3. Have Smith's managers done a good job or a poor job controling materials, labor, and overhead costs? Why? The vanances computed in Requirement 2 suggest that the managers have done a o controlling metenals and labor costs. The efficiency variance Managers have done job controling overhead costs as evidenced by the fact that of the owerhead variances are Requirement 4. Describe how Smith's managers can benefit from the standard costing system Standard costing helps managers do the following: direct materials cost variance and direct laboreficiency vanance help offset the direct labor cost vanance and direct materias * Requirements 2. Prepare a flexible budget based on the actual number of recliners sold. Compute the cost variance and the efficiency variance for direct materials and for direct labor. For manufacturing overhead, compute the variable overhead cost, variable overhead efficiency, fixed overhead cost, and fixed overhead volume variances. Round to the nearest dollar. Have Smith's managers done a good job or a poor job controlling materials, labor, and overhead costs? Why? Describe how Smith's managers can benefit from the standard costing system. 3. Static Budget (975 recliners) Actual Results (955 recliners) Sales 492,375 u ) (975 recliners x $ 505 each) (955 recliners x $ 495 each) $ 472,725 Variable Manufacturing Costs: Direct Materials 52,065 52,087 Direct Labor 91,650 (5,850 yds. @ $ 8.90 / yd.) (5,987 yds. @ $ 8.70 / yd.) (9,750 DLHr @ $ 9.40 / DLHr) (9,350 DLHr @ $ 9.50 / DLHr) (5,850 yds. @ $ 5.30 / yd.) (5,987 yds. @ $ 6.70 / yd.) 88,825 Variable Overhead 31,005 40,113 Fixed Manufacturing Costs: Fixed Overhead 60,255 62,255 Total Cost of Goods Sold 234,975 243,280 257,400 $ Gross Profit 229,445