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Headsound manufactures headphone cases. During September 2018, the company produced and sold 105,000 cases and recorded the following cost data: (Click the icon to view
Headsound manufactures headphone cases. During September 2018, the company produced and sold 105,000 cases and recorded the following cost data: (Click the icon to view the cost data.) Read the requirements. Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor. Begin wilh th quantity OH- l e t 8 cosl variances for direct malerials and direct labor, and iderntify whether each variance is fayorable (F) or unfavorable (U). (Abbrevialtions used: AC actual oost: AQ actual quantity.) Formula Variance Direct materials cost variance Direct labor cost variance - r direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC actual cost Next compute the efficiency variances. Select the required formulas, compute the efficiency variances AQ actual quantity; FOH fixed overhead; SC standard cost; SQ standard quantity.) Formula Variance Direct materials efficiency variance Direct labor efficiency variance i Data Table Standard Cost Information Quantity Cost $ Direct Materials 2 parts 0.15 per part 0.02 hours Direct Labor 7.00 per hour Variable Manufacturing Overhead 0.02 hours 10.00 per hour Fixed Manufacturing Overhead ($30,400 for static budget volume of 95,000 units and 1,900 hours, or $16 per hour) Actual Cost Information $ 0.20 per part) 7.15 per hour) 41,600 Direct Materials (208,000 parts @ (1,600 hours @ Direct Labor 11,440 Variable Manufacturing Overhead 12,000 25,000 Fixed Manufacturing Overhead Done Print Requirements 1 1. Compute the cost and efficiency variances for direct materials and direct labor. 2. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances 3. Headsound's management used better quality materials during September. Discuss the trade-off between the two direct material variances. Print Done
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