Options for requirement 3:

First blank: good, poor, reasonable

second blank: unfavorable, favorable

third blank: unfavorable, favorable

fourth blank: good, poor, reasonable

fifth blank: all, none, some

sixth blank: unfavorable, favorable

i Data Table Static Budget (1,000 recliners) $ 515,000 Actual Results (980 recliners) 470,400 52,800 52,830 Sales (1,000 recliners x $ 515 each) (980 recliners x $ 480 each) Variable Manufacturing Costs: Direct Materials (6,000 yds. @ $ 8.80 / yd.) (6,143 yds. @ $ 8.60 / yd.) Direct Labor (10,000 DLHr @ $ 9.10 / DLHr) (9,600 DLHr @ $ 9.30 / DLHr) Variable Overhead (6,000 yds. @ $ 5.00 / yd.) (6,143 yds @ $ 6.40 / yd.) Fixed Manufacturing Costs: 91,000 89,280 30,000 39,315 60,000 62,000 Fixed Overhead Total Cost of Goods Sold 233,800 243,425 226,975 281,200 $ Gross Profit Print Done Requirements 2. Prepare a flexible budget based on the actual number of recliners sold. Compute the cost variance and the efficiency variance for direct materials and for direct labor. For manufacturing overhead, compute the variable overhead cost, variable overhead efficiency, fixed overhead cost, and fixed overhead volume variances. Round to the nearest dollar. Have Juda's managers done a good job or a poor job controlling materials, labor, and overhead costs? Why? Describe how Juda's managers can benefit from the standard costing system. Print Print Done Juda Recliners manufactures leather recliners and uses flexible budgeting and a standard cost system. Juda allocates overhead based on yards of direct materials. The company's performance report includes the following selected data: Click the icon to view the selected data.) Read the requirements. Requirement 1. Prepare a flexible budget based on the actual number of recliners sold. (Round budget amounts per unit to the nearest cent.) Juda Recliners Flexible Budget Budget Amounts per Unit Actual Units (Recliners) Sales Revenue Variable Manufacturing Costs: Direct Materials Direct Labor Variable Overhead Fixed Manufacturing Costs: Fixed Overhead Total Cost of Goods Sold Gross Profit Requirement 2. Compute the cost variance and the efficiency variance for direct materials and for direct labor. For manufacturing overhead, compute the variable overhead cost, variable overhead efficiency, fixed overhead cost, and fixed overhead volume variances. Round to the nearest dollar. Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Variance Direct materials cost variance = Formula (AC-SC) XAQ (AC-SC) XAQ Direct labor cost variance Next compute the efficiency variances. Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Variance = Formula (AQ - SQ) x SC (AQ - SQ) x SC Direct materials efficiency variance Direct labor efficiency variance = Now compute the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and efficiency variances, and identify whether each variance is favorable (F) or unfavorable (U). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity; VOH = variable overhead.) Formula Variance VOH cost variance VOH efficiency variance (AC-SC) XAQ (AQ - SQ) x SC = Now compute the fixed overhead cost and volume variances. Select the required formulas, compute the fixed overhead cost and volume variances, and identify whether each variance is favorable (F) or unfavorable (U). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Variance Formula Actual FOH - Budgeted FOH = FOH cost variance FOH volume variance = = Budgeted FOH - Allocated FOH Requirement 3. Have Juda's managers done a good job or a poor job controlling materials, labor, and overhead costs? Why? The variances computed in Requirement 2 suggest that the managers have done a job controlling materials and labor costs. The direct materials cost variance and direct labor efficiency variance help offset the direct labor cost variance and direct materials efficiency variance. Managers have done a job controlling overhead costs as evidenced by the fact that of the overhead variances are Requirement 4. Describe how Juda's managers can benefit from the standard costing system. Standard costing helps managers do the following: Prepare the master budget Set target levels of performance for flexible budgets Identify performance standards Set sales prices of products and services Decrease accounting costs