Question:

The Beal Manufacturing Company's costing system has two direct-cost categories: direct materials and direct manufacturing labor. Manufacturing overhead (both variable and fixed) is allocated to products on the basis of standard direct manufacturing labor hours (DLH). At the beginning of 2014, Beal adopted the following standards for its manufacturing costs: see attached data tables

Requirements:

1. Prepare a schedule of total standard manufacturing costs for the 7,200 output units in January 2014.

2. For the month of January 2014, compute the following variances, indicating whether each is favorable (F) or unfavorable (U):

a. Direct materials price variance, based on purchases

b. Direct materials efficiency variance

c. Direct manufacturing labor price variance

d. Direct manufacturing labor efficiency variance

e. Total manufacturing overhead spending variance

f. Variable manufacturing overhead efficiency variance

g. Production-volume variance