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Sebastian Ronaldo is an accountant and analyst for Premium Door Co. which manufactures exterior doors for residential houses. Premium Door Co. uses two direct-cost categories:

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Sebastian Ronaldo is an accountant and analyst for Premium Door Co. which manufactures exterior doors for residential houses. Premium Door Co. uses two direct-cost categories: direct materials and direct manufacturing labour. Manufacturing overhead is allocated to production based upon kilograms of materials used. The following BUDGETED information was obtained from Premium Door Co.: At the beginning of the period, they budgeted annual production and sales of 315,000 doors and the following budgeted (standards) for each door: Cost per door $ 2.25 Inputs used Direct materials (brass) 0.3 kg @ $7.5/5 Direct manufacturing labour 1.2 hours @ $15/hour 18.00 Manufacturing overhead: Variable 1.20 $4.00/kg * 0.3 kg $12/kk * 0.33 Fixed 360 25.05 Budgeted cost per door The following are the ACTUAL results obtained from Premium Door Co, at the end of the accounting period: 21,750 doors 9,300 kg 8.25 6,375 kg Production Direct materials: Units purchased Price paid per kg of direct materials Direct materials used Direct manufacturing labour Hours incurred Total price paid for labour S Variable manufacturing overhead Fixed manufacturing overhead 21,900 hours 503,700 48,825 118,500 UU Focus 8.25 6,375 kg Direct Units purchased Price paid per kg of direct materials Dired materials used Direct manufacturing labour Hours incurred Total price paid for labour Vanable manufacturing overhead Fixed manufacturing overhead $ 21,900 hours 503,700 48,825 118,500 S REQUIRED 1. Compute the following variances: (20 marks) a) Direct materials price variance b) Direct materials efficiency variance c) Direct manufacturing labour price variance d) Direct manufacturing labour efficiency variance e) Variable manufacturing overhead spending variance f) Variable manufacturing overhead efficiency variance g) Production-volume variance h) Fixed manufacturing overhead spending variance Droo 15C Sunny

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