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Smart Sound manufactures headphone cases. During September 2018, the corrgarty produced and soli 105,000 cases and recented the following cost data: Click the icon to
Smart Sound manufactures headphone cases. During September 2018, the corrgarty produced and soli 105,000 cases and recented the following cost data: Click the icon to view the cost data.) Read the requirements Requirement 1. Compute the cost and efficiency variances for direct materials and direct labor. Begin with the cost vacances Select the required formulas, corpute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (L). (Abbreviations used: AC = actual cast: AQ = actual quanlity; FOH = fixed overhead; SC standard cost: SQ = standard quantity) Formula Variance Direct materials cost variance Direct labor cost variance Next compute the efficiency variances. Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost;AQ = actual quantity: FOH = fixed overhead SC - standard cost: 50 - standard quantity.) Formula Variance Direct materiais e fiolency variance Direct labor efficiency variance Requirement 2. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. Now compute the variable overhead cost and efficiency variances Select the required formulas, compute the variable overhead cost and efficiency variances, and Identify whether each varlance is favorable (F) or unfavorable (U). (Abbreviations used: AC actual cost; AQ - actual Guantity: FOH = fred overhead: SC = standard cost, sa = standard quantity: VOH = variable overhead.) Formula Variance VOH cost variance VOH efficiency variance Now compute the fored overhead cost and volume variances Select the required formulas, compute the fixed overhead cost and volume variances, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cast: AQ = actual quantity; FOH - foed overhead: SC standard cost: 50 standard quantity.) Formula FOH cost variance FOH volume variance Requirement 2. SmartSound's managerrent used belter quality materials during September. Discuss the trade-off between the two direct material variances, SmartSound's management knew that using higher quality materials would result in an) V. They hoped these materials would result in more efficient usage than "standard" materials. The result san cverall i Data Table x Standard Cost Information Direct Materials Direct Labor Variable Manufacturing Overhead Quantity Cost 2 parts $ 0.15 per part 0.02 hours 8.00 per hour 0.02 hours 10.00 per hour Fixed Manufacturing Overhead ($32,300 for static budget volume of 95,000 units and 1,900 hours, or $17 per hour) $ 41,800 Actual Cost Information Direct Materials Direct Labor Variable Manufacturing Overhead Fixed Manufacturing Overhead (209,000 parts @ $ 0.20 per part) (1,600 hours @ $ 8.10 per hour) 12,960 13,000 25,000 Print Done i Requirements - X 1. 2. Compute the cost and efficiency variances for direct materials and direct labor. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. SmartSound's management used better quality materials during September. Discuss the trade-off between the two direct material variances. 3. Print Done
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