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Michael Roberts is a cost accountant and business analyst for Darby Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct

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Michael Roberts is a cost accountant and business analyst for Darby Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labor. Roberts feels that manufacturing overhead is most closely related to material usage. Therefore, DDC allocates manufacturing overhead to production based upon pounds of materials used. 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) Ib. @ $9/1b. 2.70 Direct manufacturing labor hours @ $16/hour 19.20 Manufacturing overhead: Variable $4/1b. * 0.3 lb. 1.20 Fixed $14/1b. * 0.3 lb. 4.20 Standard cost per doorknob $27.30 Actual results for April 2017 were as follows: Production 32,000 doorknobs Direct materials purchased 12,900 lb. at $10/lb. Direct materials used 9,000 Ibs. Direct manufacturing labor 29,600 hours for $621,600 Variable manufacturing overhead 64,900 Fixed manufacturing overhead $160,000 Required 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 Variable manufacturing overhead spending variance e. Variable manufacturing overhead efficiency variance f. Production-volume variance g. Fixed manufacturing overhead spending variance 2. Variable manufacturing overhead, variance analysis. Omega Arts is a manufacturer of designer vases. The cost of each vase is the sum of three variable costs (direct material costs, direct manufacturing labor costs, and manufacturing overhead costs) and one fixed-cost category (manufacturing overhead costs). Variable manufacturing overhead cost is allocated to each vase on the basis of budgeted direct manufacturing labor- hours per vase. For June 2017, each vase is budgeted to take 4 labor-hours. Budgeted variable manufacturing overhead cost per labor-hour is $14. The budgeted number of vases to be manufactured in June 2017 is 1,100. Actual variable manufacturing costs in June 2017 were $65,205 for 1,150 vases started and completed. There were no beginning inventories or ending inventories for the vases. Actual direct manufacturing labor hours for June were 4,830. 1. Compute the flexible-budget variance, the spending variance, and the efficiency variance for variable manufacturing overhead

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