Matthew Douglas is a cost accountant and business analyst for Daily Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labor. Douglas feels that manufacturing overhead is most closely related to material usage. Therefor DDC allocates manufacturing overhead to production based upon pounds of materials used. (Click the icon to view the standards.) (Click the icon to view the actual results for April.) Read the requirements. A 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. 3.00 Flexible Actual Costs Incurred Budgeted Price Purchases Usage Budget At the beginning of 2017, DDC budgeted annual production of 400,000 doorknobs and adopted the following standards for each doorknob: Input Cost/Doorknob Direct materials (brass) 0.3 lb. @ $10/lb. $ Direct manufacturing labor 1.2 hours @ $20/hour 24.00 Manufacturing overhead: Variable 54/lb x 0.3 lb. 1.20 Fixed $14/lb. x 0.3 lb. 4.20 32.40 Standard cost per doorknob Direct materials a. Direct materials price variance (based on purchases) is b. The direct materials efficiency variance is Now complete the table for direct labor. Print Done Actual Input Qty. Actual Costs Incurred Flexible Budget Data Table Budgeted Price Direct Manuf. Labor D C. The direct manufacturing labor price variance is C d. The direct manufacturing labor efficiency variance is D O Next, complete the table for variable overhead. (Abbreviation used: Manuf = Manufacturing) Actual results for April 2017 were as follows: Production 25,000 doorknobs Direct materials purchased 13,000 lb. at $12/1b Direct materials used 7,000 lbs. Direct manufacturing labor 29,800 hours for $655,600 Variable manufacturing overhead $65,000 Fixed manufacturing overhead $154,000 Actual Costs Incurred Actual Input Qty. X Budgeted Price Flexible Budget Allocated Overhead Print Done Choose from any list or enter any number in the input fields and then continue to the next question. Matthew Douglas is a cost accountant and business analyst for Daily Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labor. Douglas feels that manufacturing overhead is most closely related to material usage. DDC allocates manufacturing overhead to production based upon pounds of materials used. (Click the icon to view the standards.) (Click the icon to view the actual results for April.) BRA II Read the requirements. u. The direct maruracurng rapor enciency variance is Data Table JU i Data Table Next, complete the table for variable overhead. (Abbreviation used: Manuf = Manufacturing) Actual Input Qty. Actual Costs Incurred Flexible Budget Allocated Overhead Budgeted Price Variable Manuf. OH At the beginning of 2017, DDC budgeted annual production of 400,000 doorknobs and adopted the following standards for each doorknob: Input Cost/Doorknob Direct materials (brass) 0.3 lb. @ $10/lb. $ 3.00 Direct manufacturing labor 1.2 hours @ $20/hour 24.00 Manufacturing overhead: Variable $4/1b x 0.3 lb. 1.20 Fixed $14/1b. x 0.3 lb. 4.20 32.40 Standard cost per doorknob Actual results for April 2017 were as follows: Production 25,000 doorknobs Direct materials purchased 13,000 lb. at $12/1b. Direct materials used 7,000 lbs. Direct manufacturing labor 29,800 hours for $655,600 Variable manufacturing overhead $65,000 Fixed manufacturing overhead $154,000 e. The variable manufacturing overhead spending variance is ung variance is f. The variable manufacturing overhead efficiency variance is Complete the table for fixed overhead. Print Done Same Budgeted Lump Sum Regardless of Output Level Flexible Print Actual Costs Incurred Done Allocated Overhead Budget Fixed Manuf. OHL g. The production-volume variance is h. The fixed manufacturing overhead spending variance is Requirement 2. Can Douglas 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 an material efficiency variance). labor time to produce the doorknobs than expected (the 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 labor 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. Choose from any list or enter any number in the input fields and then continue to the next question. Matthew Douglas is a cost accountant and business analyst for Daily Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labor. Douglas feels that manufacturing overhead is most closely related to material usage. Therefor DDC allocates manufacturing overhead to production based upon pounds of materials used. (Click the icon to view the standards.) (Click the icon to view the actual results for April.) Read the requirements. A 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. 3.00 Flexible Actual Costs Incurred Budgeted Price Purchases Usage Budget At the beginning of 2017, DDC budgeted annual production of 400,000 doorknobs and adopted the following standards for each doorknob: Input Cost/Doorknob Direct materials (brass) 0.3 lb. @ $10/lb. $ Direct manufacturing labor 1.2 hours @ $20/hour 24.00 Manufacturing overhead: Variable 54/lb x 0.3 lb. 1.20 Fixed $14/lb. x 0.3 lb. 4.20 32.40 Standard cost per doorknob Direct materials a. Direct materials price variance (based on purchases) is b. The direct materials efficiency variance is Now complete the table for direct labor. Print Done Actual Input Qty. Actual Costs Incurred Flexible Budget Data Table Budgeted Price Direct Manuf. Labor D C. The direct manufacturing labor price variance is C d. The direct manufacturing labor efficiency variance is D O Next, complete the table for variable overhead. (Abbreviation used: Manuf = Manufacturing) Actual results for April 2017 were as follows: Production 25,000 doorknobs Direct materials purchased 13,000 lb. at $12/1b Direct materials used 7,000 lbs. Direct manufacturing labor 29,800 hours for $655,600 Variable manufacturing overhead $65,000 Fixed manufacturing overhead $154,000 Actual Costs Incurred Actual Input Qty. X Budgeted Price Flexible Budget Allocated Overhead Print Done Choose from any list or enter any number in the input fields and then continue to the next question. Matthew Douglas is a cost accountant and business analyst for Daily Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labor. Douglas feels that manufacturing overhead is most closely related to material usage. DDC allocates manufacturing overhead to production based upon pounds of materials used. (Click the icon to view the standards.) (Click the icon to view the actual results for April.) BRA II Read the requirements. u. The direct maruracurng rapor enciency variance is Data Table JU i Data Table Next, complete the table for variable overhead. (Abbreviation used: Manuf = Manufacturing) Actual Input Qty. Actual Costs Incurred Flexible Budget Allocated Overhead Budgeted Price Variable Manuf. OH At the beginning of 2017, DDC budgeted annual production of 400,000 doorknobs and adopted the following standards for each doorknob: Input Cost/Doorknob Direct materials (brass) 0.3 lb. @ $10/lb. $ 3.00 Direct manufacturing labor 1.2 hours @ $20/hour 24.00 Manufacturing overhead: Variable $4/1b x 0.3 lb. 1.20 Fixed $14/1b. x 0.3 lb. 4.20 32.40 Standard cost per doorknob Actual results for April 2017 were as follows: Production 25,000 doorknobs Direct materials purchased 13,000 lb. at $12/1b. Direct materials used 7,000 lbs. Direct manufacturing labor 29,800 hours for $655,600 Variable manufacturing overhead $65,000 Fixed manufacturing overhead $154,000 e. The variable manufacturing overhead spending variance is ung variance is f. The variable manufacturing overhead efficiency variance is Complete the table for fixed overhead. Print Done Same Budgeted Lump Sum Regardless of Output Level Flexible Print Actual Costs Incurred Done Allocated Overhead Budget Fixed Manuf. OHL g. The production-volume variance is h. The fixed manufacturing overhead spending variance is Requirement 2. Can Douglas 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 an material efficiency variance). labor time to produce the doorknobs than expected (the 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 labor 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. Choose from any list or enter any number in the input fields and then continue to the next
