Jeffrey Dickens is a cost accountant and business analyst for Dashing Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labor. Dickens feels that manufacturing overhead is most closely related to material usage. There DDC allocates manufacturing overhead to production based upon pounds of materials used. 3(Click the icon to view the standards.) (Click the icon to view the actual results for April.) Read the requirements. Data Table Requirement 1. For the month of April, compute the variances, indicating whether each is favorable (F) or unfavorable (U). Before computing the variances complete the tables below. Begin by completing the table for direct materials. Actual Input Qty. Actual results for April 2017 were as follows: Production 30,000 doorknobs Direct materials purchased 12,700 lb. at $10/1b. Direct materials used 8,600 lbs Direct manufacturing labor 29,100 hours for $582,000 Variable manufacturing overhead $64,700 Fixed manufacturing overhead $160,000 ts Flexible A Actual Costs Incurred Requirements Budgeted Price Purchases Usage O O Budget Direct materials D a. Direct materials price variance (based on purchases) is L L Print O b. The direct materials efficiency variance is D Done Now complete the table for direct labor. 1. For the month of April, compute the following variances, indicating whether each is favorable (F) or unfavorable (U). a. Direct materials price variance (based on purchases) b. Direct materials efficiency variance c. Direct manufacturing labor price variance d. Direct manufacturing labor efficiency variance e. Variable manufacturing overhead spending variance f. Variable manufacturing overhead efficiency variance g. Production-volume variance h. Fixed manufacturing overhead spending variance 2. Can Dickens use any of the variances to help explain any of the other variances? Give examples. Actual Input Qty. Actual Costs Incurred Flexible Budget Budgeted Price Direct Manuf. Labor 2.70 C. The direct manufacturing labor price variance is Print Done At the beginning of 2017, DDC budgeted annual production of 410.000 doorknobs and adopted the following standards for each doorknob: Input Cost/Doorknob Direct materials (brass) 0.3 lb. @ $9/16. $ Direct manufacturing labor 1.2 hours @ $15/hour 18.00 Manufacturing overhead: Variable $4/1b 0.3 lb. 1.20 Fixed $14/1b. x 0.3 lb. 4.20 26.10 Standard cost per doorknob d. The direct manufacturing labor efficiency variance is N Next, complete the table for variable overhead. (Abbreviation used: Manuf = Manufacturing) Actual Input Qty. Actual Input Qty. Actual Costs Incurred Flexible Budget Allocated Overhead Budgeted Price Variable Manuf. OH e. The variable manufacturing overhead spending variance is L L f. The variable manufacturing overhead efficiency variance is Complete the table for fixed overhead. Actual Costs Incurred O Same Budgeted Lump Sum Regardless of Output Level C Flexible Budget O Allocated Overhead Fixed Manuf. OH C g. The production-volume variance is h. The fixed manufacturing overhead spending variance is Requirement 2. Can Dickens use any of the variances to help explain any of the other variances? Give examples. The direct materials price variance indicates that DDC paid for brass than they had planned. If this is because they purchased a quality brass, it may explain why they used brass than expected (leading to a[n) material efficiency variance). labor time to produce the doorknobs than expected (the direct labor In turn, since variable manufacturing overhead is assigned based on pounds of materials used, this directly led to the variable overhead efficiency variance. The purchase of this quality of brass may also explain why it took efficiency variance). Finally, the direct labor price variance could imply that the workers who were hired were experienced than expected, which could also be related to the direct material and direct labor efficiency variances