parts e-h

8-28 Flexible-budget variances, review of Chapters 7 and 8. Eric Williams is a cost accountant and business analyst for Diamond Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labour. Williams feels that manufacturing overhead is most closely related to material usage. Therefore, DDC allocates manufacturing overhead to production based upon kilograms of materials used. At the beginning of 2017, DDC budgeted annual production of A20,000 doorknobs and adopted the following standards for each doorknob: Input 0.3 kg @ $10/kg 1.2 hours @ $17/hour Cost/Doorknob $ 3.00 20.40 Direct materials (brass) Direct manufacturing labour Manufacturing overhead: Variable Fixed Standard cost per doorknob $5/kg x 0.3 kg $15/kg x 0.3 kg 1.50 4.50 $29.40 Actual results for April 2017 were as follows: Production Direct materials purchased Direct materials used Direct manufacturing labour Variable manufacturing overhead Fixed manufacturing overhead 29,000 doorknobs 12,400 kg at $11/kg 8,500 kg 29,200 hours for $671,600 $ 65,100 $158,000 Required 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