GrandScapes is a manufacturer of large flower pots for urban settings. The company has these standards: E(Click the icon to view the standards.) EEB (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. Actual quantity purchased Actual price Standard price =DM price variance ( = Determine the formula for the quantity variance, then compute the quantity variance for direct material. Standard price Actual quantity used Standard quantity allowed DM quantity variance Requirement 2. Who is generally responsible for each variance? The purchasing department is responsible for the materials quantity variance department is responsible for the materials price variance. The production Requirement 3. Interpret the variances The unfavorable materials price variance means that the actual price Groovy Bottles' personnel paid for resin exceeded the standard budgeted price for resin. The unfavorable materials quantity variance means that Groovy Bottles' employees used more resin than they should have to produce 1,700 pots Standards i Actual Results e varian Direct ma Chic Design 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 2,100 flower pots: Direct materials (resin) 10 pounds per pot at a cost of $6.00 per pound OM price Direct labor 5.0 hours at a cost of $19.00 per hour Purchased 23.070 pounds at a cost of Direct materials Standard variable manufacturing $6.20 per pound; used 22,470 pounds to overhead rate $7.00 per direct labor hour produce 2,100 pots $83,000 Budgeted fixed manufacturing overhead Worked 5.5 hours per flower pot (11,550 Direct labor $8.00 per direct labor hour (DLH) Standard fixed MOH rate total DLH) at a cost of $18.00 per hour Actual variable manufacturing overhead ... . $7.70 per direct labor hour for total Print Done actual variable manufacturing overhead of $88,935 Actual fixed manufacturing overhead $82,400 ... . . . Standard fixed manufacturing overhead allocated based on actual production $84,000 ..... . hoose from any list or enter any number in the input fields and then click Check Answer. Print Done narte
