Question
Nathan Dickens is a cost accountant and business analyst for Damask Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct
Nathan Dickens is a cost accountant and business analyst for Damask Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labour. Dickens feels that manufacturing overhead is most closely related to material usage. Therefore, DDC allocates manufacturing overhead to production based upon kilograms of materials used (Click the icon to view the standards.) (Click the icon to view the actual results for April.) Required Requirement 1. For the month of April, compute the variances, indicating whether each is favourable (F) or unfavourable (U) a. Direct materials price variance (based on purchases) is b. The direct materials efficiency variance is c. The direct manufacturing labour price variance is d. The direct manufacturing labour efficiency variance is e. The variable manufacturing overhead spending variance is f. The variable manufacturing overhead efficiency variance is Choose from any list or enter any number in the input fields and then continue to the next question. D Data Table - X At the beginning of 2017, DDC budgeted annual production of 440,000 doorknobs and adopted the following standards for each doorknob: Direct materials (brass) Input Cost/Doorknob 0.3 kg. @$11/kg. $ 3.30 Direct manufacturing labour 1.2 hours @$19/hour 22.80 Manufacturing overhead: Variable Fixed $6/kg. x 0.3 kg. 1.80 4.20 $14/kg. x 0.3 kg. 32.10 e is Standard cost per doorknob aria aria Print Done uses tv erhead Actual results for April 2017 were as follows: Production Direct materials purchased Direct materials used Direct manufacturing labour 33,000 doorknobs 12,600 kg. at $12/kg. 7,500 kgs. Variable manufacturing overhead Fixed manufacturing overhead 29,500 hours for $619,500 $64,700 $162,000 Print Done 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 Dickens use any of the variances to help explain any of the other variances? Give examples. Print Done Iso han Dickens is a cost accountant and business analyst for Damask Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and dire nufacturing labour. Dickens feels that manufacturing overhead is most closely related to material usage. Therefore, DDC allocates manufacturing overhead to production based upon kilograms of materials us (Click the icon to view the standards.) (Click the icon to view the actual results for April.) equired .The production-volume variance is th. 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 expected (leading to a(n) material efficiency variance). quality brass, it may explain why they used brass than In turn, since variable manufacturing overhead is assigned based on kilograms of materials used. this directly led to the may also explain why it took labour time to produce the doorknobs than expected (the variable overhead efficiency variance. The purchase of this quality of brass direct labour efficiency variance). Finally, the direct labour 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 labour efficiency variances Choose from any list or enter any number in the input fields and then continue to the next
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started