SmartSound manufactures headphone cases. During September 2018, the company produced and sold 106,000 cases and recorded 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 variances. Select the required formulas, compute the cost 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; SQ = standard quantity.) Formula Variance the efficiency variances for direct materials and direct labor, and identify whether each cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard Direct materials cost variance Direct labor cost variance (AC-SC) AQ Next compute the efficiency variances. S variance is favorable (F) or unfavorable (AC-SC) * SQ quantity.) (AQ - SQ) AC (AQ - SQ) SC Actual FOH - Allocated FOH Direct materials efficiency variance Actual FOH - Budgeted FOH Direct labor efficiency variance Budgeted FOH - Allocated FOH 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 variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity; VOH = variable overhead.) Formula Variance VOH cost variance VOH efficiency variance Now compute the fixed 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 cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Formula V favorable direct material cost variance FOH cost variance favorable direct material efficiency variance FOH volume variance unfavorable direct material cost variance Requirement 3. SmartSound's management used better quality materials during Septem unfavorable direct material efficiency variance al variances. V. They hoped these materials SmartSound's management knew that using higher quality materials would result in a(n) would result in more efficient usage than "standard" materials. The result was an overall i X Data Table Standard Cost Information Quantity Cost Direct Materials 2 parts $0.15 per part Direct Labor 0.02 hours 7.00 per hour Variable Manufacturing Overhead 0.02 hours 11 per hour Fixed Manufacturing Overhead ($30,720 for static budget volume of 96,000 units and 1,920 hours, or $16 per hour) Actual Cost Information Direct Materials (209,000 parts @ $0.20 per part) Direct Labor (1,620 hours @ $7.15 per hour) Variable Manufacturing Overhead Fixed Manufacturing Overhead $ 41,800 11,583 15,000 25,000 Print Done