QUESTION 8-28 (24 marks) FOR: DIRECT MANUFACTURING LABOR ACTUAL COSTS Actual Qx Actual Rate Actual Qx Budget Rate FLEXIBLE BUDGET Budget for actual output x Budget Rate Hours S Hour 11:0 1:10 0,1-11 Total $ (Uor) (UFF) Name the Variance: Variance Variance FOR: DIRECT MATERIALS ACTUAL COSTS Actual Qx Actual Rate Actual Qx Budget Rate FLEXIBLE BUDGET Budget Q for actual output x Budget Rate S/Unit 0-1-0 HAN Total $ LU Name the Variance: Variance (Based upon purchases) Variance (Based upon amount used) 08-28 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 420,000 doorknobs and adopted the following standards for each doorknob: Cost/Doorknob Input 0.3 kg @ $10/kg 1.2 hours @ $17/hour $ 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