Pratt 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:
i Standard Price and Volume - Standards: Direct materials 24.0 yards per awning at $13.00 per yard Direct labor 3.0 hours per awning at $18.00 per hour Variable MOH standard rate $8.00 per direct labor hour Predetermined fixed MOH standard rate $5.00 per direct labor hour Total budgeted fixed MOH cost $28,200 Print Done 1 Actual Results Purchased 50,000 yards at a total cost of $630,000 Used 46,900 yards in producing 2,000 awnings Actual direct labor cost of $106,247 for a total of 5,870 hours Actual variable MOH $49,308 Actual fixed MOH $33,200 Print Done i 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? Print Done Pratt 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.) All manufacturing overhead is allocated on the basis of direct labor hours. Read the requirements. 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 Choose from any list or enter any number in the input fields and then continue to the next question. Pratt Awning manufactures awnings and uses a standard cost system. The company Actual cost and operating data from the most recent month are as follows: allocates overhead based on the number of direct labor hours. The following are the BE: (Click the icon to view the actual results.) company's cost and standards data: All manufacturing overhead is allocated on the basis of direct labor hours. (Click the icon to view the standards.) Read the requirements. Requirement 2a. Calculate the direct material 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: DM = Direct materials.) First determine the formula for the price variance, then compute the price variance for direct materials. V - DM price variance ntity variance, then compute the quantity variance for direct materials. ( DM quantity variance Actual hours D Actual price Actual quantity purchased Actual quantity used Standard hours allowed CH Standard price Standard quantity allowed number in the input fields and then continue to the next question. Pratt 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: B (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.) All manufacturing overhead is allocated on the basis of direct labor hours. Read the requirements. 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. x( DL rate variance - FI Actual hours Actual quantity purchased Actual rate efficiency variance, then compute the efficiency variance for direct labor. = DL efficiency variance Standard hours allowed Ch Standard rate number in the input fields and then continue to the next question. ? Pratt 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: BE: (Click the icon to view the actual results.) All manufacturing overhead is allocated on the basis of direct labor hours. Read the requirements. x( = First determine the formula for the efficiency variance, then compute the efficiency variance for direct labor. = DL efficiency variance x( x( ) = mounts to the nearest cent and your answers Requirement 2c. Calculate the variable manufacturing overhead variances. (Enter the variances as positive numbers. Enter cur to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U).) F. U First determine the formula for the rate variance, then compute the rate variance for variable manufacturing overhead. (Round in alculations to the nearest cent.) Choose from any list or enter any number in the input fields and then continue to the next question. ? Pratt Awning manufactures awnings and uses a standard cost system. The company Actual cost and operating data from the most recent month are as follows: allocates overhead based on the number of direct labor hours. The following are the (Click the icon to view the actual results.) company's cost and standards data: All manufacturing overhead is allocated on the basis of direct labor hours. (Click the icon to view the standards.) Read the requirements. 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 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 cent.) Variable overhead Ixil - rate variance x e efficiency variance, then compute the efficiency variance for variable Actual hours Now compute the variable manufacturing overhead efficiency variance. manufacturing overhead. Actual quantity purchased Actual rate Choose from any list or enter any number in the input fields and the Standard hours allowed Standard rate 0 Pratt 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: E(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.) All manufacturing overhead is allocated on the basis of direct labor hours. 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 overhead. 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 overhead Choose from any list or enter any number in the input fields and then continue to the next question. ? Pratt Awning manufactures awnings and uses a standard cost system. The company Actual cost and operating data from the most recent month are as follows: allocates overhead based on the number of direct labor hours. The following are the |(Click the icon to view the actual results.) company's cost and standards data: All manufacturing overhead is allocated on the basis of direct labor hours. B (Click the icon to view the standards.) Read the requirements. Now compute the fixed manufacturing overhead volume variance. First determine the formula for the volume variance, then compute the volume variance for fixed manufacturing overhead. Fixed MOH volume variance bu calculated means and give at least one possible explanation for each of those variances. Actual fixed overhead Budgeted fixed overhead D Standard hours allowed Standard quantity allowed Standard rate CI Std. fixed overhead cost allocated to production 1 Doccihlo aunlanation it fields and then continue to the next question. ? o Pratt 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.) All manufacturing overhead is allocated on the basis of direct labor hours. Read the requirements. 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: Possible explanation Variance Meaning DM price DM quantity it took less material than the standard to produce the 2,000 awnings Direct Labor: it took more material than the standard to produce the 2,000 awnings the actual price paid for material was more than the standard Choose from ar the actual price paid for material was less than the standard Varianna Doccihla avnlanation next question. ? Pratt 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.) All manufacturing overhead is allocated on the basis of direct labor hours. Read the requirements. 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 Meaning Possible explanation DM price DM quantity Direct Labor: additional suppliers entered the market purchasing higher quality materials Varianna Meaning Dnceihin avnlanation Choose from any list or enter any number in the input fields and then continue to the next question. Pratt 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.) All manufacturing overhead is allocated on the basis of direct labor hours. Read the requirements. Direct Labor: Variance Meaning Possible explanation DL rate DL efficiency Variable manufacturing overhead: Variance Meaning Possible explanation 1 VOH rate Choose from any list or enter any number in the input fields and then continue to the next question. ? Pratt 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.) All manufacturing overhead is allocated on the basis of direct labor hours. Read the requirements. Variable manufacturing overhead: Variance Meaning Possible explanation VOH rate VOH efficiency Fixed manufacturing overhead: Choose from any list or enter any number in the input fields and then continue to the next question. o Pratt 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.) All manufacturing overhead is allocated on the basis of direct labor hours. Read the requirements. Fixed manufacturing overhead: Variance Meaning Possible explanation FOH budget FOH volume Are any of the variances likely to be interrelated? Choose from any list or enter any number in the input fields and then continue to the next
