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Johnson, Inc., manufactures lead crystal glasses. Johnson, Inc.'s managers recently calculated the following: Variances after completing production of 7,000 glasses: Direct materials cost variance $840
Johnson, Inc., manufactures lead crystal glasses. Johnson, Inc.'s managers recently calculated the following: Variances after completing production of 7,000 glasses: Direct materials cost variance $840 U Direct labor cost variance $8,400 F Direct materials efficiency variance $700 U Direct labor efficiency variance $23,800 URequirement 2. Interpret the direct materials and direct labor variances for Johnson, Inc.'s management. The 840 unfavorable direct materials cost variance indicates that the actual direct materials cost per pound was than the standard cost per pound. This Johnson, Inc.'s operating income by 840. The 700 unfavorable direct materials efficiency variance indicates that the actual pounds used was than the total pounds allowed to manufacture the 7,000 glasses. This Johnson, Inc.'s operating income by 700. The $8,400 favorable direct labor price variance means that Johnson, Inc.'s employees were paid per hour than budgeted. This Johnson, Inc.'s operating income by $8,400. The $23,800 unfavorable direct labor efficiency variance means that it actually took direct labor hours than were budgeted to produce 7,000 glasses. This Johnson, Inc.'s operating income by $23,800
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