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Henry Company produces bird houses and has determined the following direct cost categories and budgeted amounts: Standard InputsStandard Cost per input $7.50 9.00 3.00
Henry Company produces bird houses and has determined the following direct cost categories and budgeted amounts: Standard InputsStandard Cost per input $7.50 9.00 3.00 Category Direct Materials for 1 unit output 1.00 Direct Labour 0.30 Direct Marketing 0.50 Actual performance for the company is shown below: Actual output: (in units) Direct Materials: Materials costs 4.000 30,225 3,900 Input purchased and used Actual price per input Direct Manufacturing Labour: Labour costs $7.75 S11,470 1,240 $9.25 Labour-hours of input Actual price per hour Direct Marketing Labour: Labour costs Labour-hours of input Actual price per hour $5,880 2,100 $2.80 Required: a. Determine the "price" and "quantity" variances for each cost category. b. Determine the combined total flexible-budget variance for each cost category? c. Summarize the variances. Comment on possible cause for each, identifying potential connections between the variances.
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