Pickul Awning manufactures awnings and uses a standard cost system. The company allocates overhead based on the number of direct labor hours. The Actual cost and operating data from the most recent month are as follows: following are the company's cost and standards data: F (Click the icon to view the actual results) (Click the icon to view the standards.) All manufacturing overhead is allocated on the basis of direct labor hours. Read the requirements Standard Price and Volume i Actual Results Standards: Direct materials 19.0 yards per awning at $10.00 per yard Direct labor 40 hours per awning af $13.90 per hour Variable MOH standard rate 56.00 per direct labor hour Predetermined forced MOH standard rate $7.00 per direct labor hour Total budgeted fixed MOH cost 552.900 Purchased 47.610 yards at a total cost of $457,056 Used 42,900 yards in producing 2.300 awnings Actual direct labor cost of $118.686 for a total of 9.060 hours Actual variable MOH $57,078 Actual foxed MOH $67 900 rest whole dollar Label the variance as favorable (F) or unfavora Pant Done Print Done Determine the formula for the quantity variance, then compute the quantity variance for direct materials Requirements 1. Calculate the standard cost of one awning, 2. Calculate the following variances. a. The direct material variances. b. The direct labor variances. c. The variable manufacturing overhead variances. d. The fixed manufacturing overhead variances. 3. Explain what each of the variances you calculated means and give at least one possible explanation for each of those variances. Are any of the variances likely to be interrelated? Requirement 1. Calculate the standard cost of one awning. Standard cost Standard cost per unit Direct materials Direct labor Variable MOH Fixed MOH Total standard cost Requirement 2a. Calculate the direct material variances (Enter the variances as positive numbers. Enter currency amounts to the nearest centar First determine the formula for the price variance, then compute the price variance for direct materials. DM 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 Direct labor.) First determine the formula for the rate variance, then compute the rate variance for direct labor. = DL rate variance x First determine the formula for the efficiency variance, then compute the efficiency variance for direct labor x( DL efficiency variance rarioblo manufacturing overhead variance Enter the variances as positive numbers Fnter Cuency amount Requirement 2c. Calculate the variable manufacturing overhead variances. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the First determine the formula for the rate variance, then compute the rate variance for variable manufacturing overhead (Round interim calculations to the nearest cent.) Variable overhead ) = rate variance Now compute the variable manufacturing overhead efficiency variance. First determine the formula for the efficiency variance, then compute the efficiency variance for variable manufacturi Variable overhead efficiency variance Read the requirements Requirement 2d. Calculate the fixed manufacturing overhead variances (Enter the variance as a positive number. Label the variance as favorable (F) or unfavorable (U).) Begin by computing the fixed manufacturing overhead budget variance. First determine the formula for the budget variance, then compute the budget variance for fixed manufacturing o Fixed MOH budget variance Now compute the fixed manufacturing overhead volume variance. First determine the formula for the volume variance, then compute the volume variance for fixed manufacturing overhe Fixed MOH volume variance 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: Variance DM price DM quantity Meaning it took less material than the standard to produce the 2,300 awnings it took more material than the standard to produce the 2,300 awnings Possible explanation additional suppliers entered the market purchasing higher quality materials Direct Labor Variance DL rate DM efficiency Meaning the actual labor rate paid for was less than the standard the actual labor rate paid for was more than the standard Possible explanation decreased efficiency of employees hired less qualified employees Variable manufacturing overhead: Variance Meaning it took less labor hours than the standard to produce 2,300 awnings VOH rate Possible explanation cost saving in any VOH costs decreased efficiency of employees decreased efficiency of employees hired less qualified employees VOH efficiency less was spent on VOH than the standard Fixed manufacturing overhead: Variance FOH budget Meaning the volume was higher than anticipated Possible explanation decreased efficiency of employees decreased efficiency of employees hired more qualified employees more units were produced with the same amount of fixed resources FOH volume the volume was lower than anticipated Are any of the variances likely to be interrelated? variance. It is likely that Pickul Awning hired more qualified employees at a higher rate This may have resulted in improved variance is likely to be related to the favorable DL rate efficiency The favorable DL efficiency Pickul Awning manufactures awnings and uses a standard cost system. The company allocates overhead based on the number of direct labor hours. The Actual cost and operating data from the most recent month are as follows: following are the company's cost and standards data: F (Click the icon to view the actual results) (Click the icon to view the standards.) All manufacturing overhead is allocated on the basis of direct labor hours. Read the requirements Standard Price and Volume i Actual Results Standards: Direct materials 19.0 yards per awning at $10.00 per yard Direct labor 40 hours per awning af $13.90 per hour Variable MOH standard rate 56.00 per direct labor hour Predetermined forced MOH standard rate $7.00 per direct labor hour Total budgeted fixed MOH cost 552.900 Purchased 47.610 yards at a total cost of $457,056 Used 42,900 yards in producing 2.300 awnings Actual direct labor cost of $118.686 for a total of 9.060 hours Actual variable MOH $57,078 Actual foxed MOH $67 900 rest whole dollar Label the variance as favorable (F) or unfavora Pant Done Print Done Determine the formula for the quantity variance, then compute the quantity variance for direct materials Requirements 1. Calculate the standard cost of one awning, 2. Calculate the following variances. a. The direct material variances. b. The direct labor variances. c. The variable manufacturing overhead variances. d. The fixed manufacturing overhead variances. 3. Explain what each of the variances you calculated means and give at least one possible explanation for each of those variances. Are any of the variances likely to be interrelated? Requirement 1. Calculate the standard cost of one awning. Standard cost Standard cost per unit Direct materials Direct labor Variable MOH Fixed MOH Total standard cost Requirement 2a. Calculate the direct material variances (Enter the variances as positive numbers. Enter currency amounts to the nearest centar First determine the formula for the price variance, then compute the price variance for direct materials. DM 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 Direct labor.) First determine the formula for the rate variance, then compute the rate variance for direct labor. = DL rate variance x First determine the formula for the efficiency variance, then compute the efficiency variance for direct labor x( DL efficiency variance rarioblo manufacturing overhead variance Enter the variances as positive numbers Fnter Cuency amount Requirement 2c. Calculate the variable manufacturing overhead variances. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the First determine the formula for the rate variance, then compute the rate variance for variable manufacturing overhead (Round interim calculations to the nearest cent.) Variable overhead ) = rate variance Now compute the variable manufacturing overhead efficiency variance. First determine the formula for the efficiency variance, then compute the efficiency variance for variable manufacturi Variable overhead efficiency variance Read the requirements Requirement 2d. Calculate the fixed manufacturing overhead variances (Enter the variance as a positive number. Label the variance as favorable (F) or unfavorable (U).) Begin by computing the fixed manufacturing overhead budget variance. First determine the formula for the budget variance, then compute the budget variance for fixed manufacturing o Fixed MOH budget variance Now compute the fixed manufacturing overhead volume variance. First determine the formula for the volume variance, then compute the volume variance for fixed manufacturing overhe Fixed MOH volume variance 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: Variance DM price DM quantity Meaning it took less material than the standard to produce the 2,300 awnings it took more material than the standard to produce the 2,300 awnings Possible explanation additional suppliers entered the market purchasing higher quality materials Direct Labor Variance DL rate DM efficiency Meaning the actual labor rate paid for was less than the standard the actual labor rate paid for was more than the standard Possible explanation decreased efficiency of employees hired less qualified employees Variable manufacturing overhead: Variance Meaning it took less labor hours than the standard to produce 2,300 awnings VOH rate Possible explanation cost saving in any VOH costs decreased efficiency of employees decreased efficiency of employees hired less qualified employees VOH efficiency less was spent on VOH than the standard Fixed manufacturing overhead: Variance FOH budget Meaning the volume was higher than anticipated Possible explanation decreased efficiency of employees decreased efficiency of employees hired more qualified employees more units were produced with the same amount of fixed resources FOH volume the volume was lower than anticipated Are any of the variances likely to be interrelated? variance. It is likely that Pickul Awning hired more qualified employees at a higher rate This may have resulted in improved variance is likely to be related to the favorable DL rate efficiency The favorable DL efficiency