Jeffrey Harris is a cost accountant and business analyst for Dapper Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labour. Harris feels that manufacturing overhead is most closely related to material usage. Therefore, DDC allocates manufacturing overhead to production based upon kilograms of materials used.

Standards At the beginning of the year, DDC budgeted annual production of 440,000 doorknobs and adopted the following standards for each doorknob: Actual results Required 1. For the month of April, compute the following variances, indicating whether each is favourable (F) or unfavourable (U). a. Direct materials price variance (based on purchases) b. Direct materials efficiency variance c. Direct manufacturing labour price variance d. Direct manufacturing labour 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 Harris use any of the variances to help explain any of the other variances? Give examples