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Requirement 2. Can Jones use any of the variances to help explain any of the other variances? Give examples. quality brass, it may explain why
Requirement 2. Can Jones use any of the variances to help explain any of the other variances? Give examples. quality brass, it may explain why they used The direct materials price variance indicates that DDC paid for brass than they had planned. If this is because they purchased a brass than expected (leading to a(n) material efficiency variance). In turn, since variable manufacturing overhead is assigned based on pounds of materials used, this directly led to the variable overhead efficiency variance. The purchase of this quality of brass may also explain why it took labor time to produce the doorknobs than expected (the direct labor efficiency variance). experienced than expected, which could also be related to the direct Finally, the direct labor price variance could imply that the workers who were hired were material and direct labor efficiency variances. Ross Jones is a cost accountant and business analyst for Datura Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labor. Jones feels that manufacturing overhead most closely related to material usage. Therefore, DDC allocates manufacturing overhead to production based upon pounds of materials used. (Click the icon to view the standards.) (Click the icon to view the actual results for April.) Read the requirements, Requirement 1. For the month of April, compute the variances, indicating whether each is favorable (F) or unfavorable (U). a. Direct materials price variance (based on purchases) is 12300 U b. The direct materials efficiency variance is 1800 F C. The direct manufacturing labor price variance is 148000 U d. The direct manufacturing labor efficiency variance is 30400 F e. The variable manufacturing overhead spending variance is 12000|| U 21000 F f. The variable manufacturing overhead efficiency variance is g. The production-volume variance is 50800 U h. The fixed manufacturing overhead spending variance is Requirement 2 Can Llones use any of the variances to help explain any of the other variances 2 Give examples
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