Question
Ross Douglas is a cost accountant and business analyst for Dallas Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories:
Ross Douglas is a cost accountant and business analyst for Dallas Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labor. Douglas feels that manufacturing overhead is 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.) Read the requirements. Click the icon to view the actual results for April.) Requirement 1. For the month of April, compute the variances, indicating whether each is favorable (F) or unfavorable (U). Before computing the variances complete the tables below. Begin by completing the table for direct materials. Actual Input Qty. x Budgeted Direct materials Price Actual Costs Incurred Purchases Usage Flexible Budget mapter 8 Ross Douglas is a cost accountant and materials and direct manufacturing lab based upon pounds of materials used. (Click the icon to view the standar Read the requirements. Requirement 1. For the month of Apri Before computing the variances compl Ta Data table Requirements 1. For the month of April, 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. Variable manufacturing overhead spending variance f. Variable manufacturing overhead efficiency variance g. Production-volume variance h. Fixed manufacturing overhead spending variance 2. Can Douglas use any of the variances to help explain any of the other variances? Give examples. Actual results for April 2020 were as follows: Production Direct materials purchased 33,000 doorknobs Data table Xpoints Save DDC uses two direct-cost categories: direct Callocates manufacturing overhead to production At the beginning of 2020, DDC budgeted annual production of 430,000 doorknobs and adopted the following standards for each doorknob: 12,800 lb. at $11/lb. 7,000 lbs. 29,600 hours for $651,200 Direct materials (brass). Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Standard cost per doorknob Direct materials used Direct manufacturing labor Variable manufacturing overhead $64,500 Fixed manufacturing overhead $152,000 Print Done Input Cost/Doorknob 0.3 lb. at $9/lb. 1.2 hours at $15/hour S 2.70 18.00 $7/16 0.3 lb. 2.101 4.20 $144b. x 0,3 b 27.00 Print Done
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