Parson Awning manufactures awnings and uses a standard cost system. The company allocates overhead based on the number of direct labor hours. The following are the company's cost and standards data: (Click the icon to view the standards.) Actual cost and operating data from the most recent month are as follows: Click the icon to view the actual results.) Al manufacturing overhead is allocated on the basis of direct labor hours. Do Read the requirements Requirement 1. Calculate the standard cost of one awning Standard cost per unit Standard cost Direct materials Direct labor Variable MOH Fixed MOH Tot standard cost Requirement 2a. Calculate the direct material variances. Enter the variances as positive numbers. Enter currency amounts to the nearest dent and your answers to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U) Abbreviations used: M = Direct materia ) First determine the formula for the price variance, then compute the price variance for direct materials OM price variance ) Determine the formula for the quantity variance, then compute the quantity variance for direct materials ) - DM quantity variance Requirement 2b. Calculate the direct labor variances (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U) Abbreviations used: DL - Direct labor) First determine the formula for the rate variance, then compute the rate variance for direct labor. DL rate variance First determine the formula for the efficiency variance, then compute the efficiency variance for direct labor ) DL efficiency variance Read the requirements Requirement 2c. Calculate the variable manufacturing overhead variances. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent your answers to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U).) First determine the formula for the rate variance, then compute the rate variance for variable manufacturing overhead. (Round interim calculations to the nearest cen Variable overhead rate variance Now compute the variable manufacturing overhead officiency variance. First determine the formula for the efficiency variance, then compute the efficiency variance for variable manufacturing overhead. Variable overhead efficiency variance ak Requirement 2d. Calculate the fixed manufacturing overhead variances (U).) the label the same Begin by computing the fixed manufacturing overhead budgetariano Fast Germine them manufacturing overhead or the budget another came bed Now compute the fixed manufacturing overhead volume variance Fest determine the tomate the volume r manufacturing overhead e ncont r e Requirement 3. Explain what each of the variances you calculated means and give at least one possible explanation for each of those variances. Direct materials: Meaning Possible explanation Variance DM price DM quantity Direct Labor: Meaning Possible explanation Variance DL rate DM efficiency Variable manufacturing overhead: Meaning Variance VOH rate Possible explanation VOH efficiency Choose from any list or enter any number in the input fields and then continue to the next question Fixed manufacturing overhead: Meaning Variance FOH budget Possible explanation FOH volume Are any of the variances likely to be interrelated? The variance is likely to be related to the This may have resulted in variance. It is likely that Parson Awning Choose from any list or enter any number in the input fields and then continue to the next question HUU UUU . Meaning i Standard Price and Volume iciency manufacturing overhead: Meaning ice sudget Standards: Direct materials 20.0 yards per awning at $17.00 per yard Direct labor 2.0 hours per awning at $15.00 per hour Variable MOH standard rate $2.00 per direct labor hour Predetermined fixed MOH standard rate $7.00 per direct labor hour Total budgeted fixed MOH Cost $23,000 volume Print Done any of the variances likely to be inte v variance is likely to be related to the y varianne H a th i Actual Results uring overhead: Meaning Purchased 38,700 yards at a total cost of $642,420 Used 35,000 yards in producing 1,800 awnings Actual direct labor cost of $51,590 for a total of 3,350 hours Actual variable MOH $7,035 Actual fixed MOH $28,000 Print Done variances likely to be interr
