Standard Price and Volume Standards: Direct materials 21.0 yards per awning at $15.00 per yard Direct labor 5.0 hours per awning at $17.00 per hour Variable MOH standard rate $4.00 per direct labor hour Predetermined fixed MOH standard rate $7.00 per direct labor hour Total budgeted fixed MOH cost $78,200 Print Done X Actual Results 1 Purchased 51,750 yards at a total cost of $755,550 Used 47,500 yards in producing 2,300 awnings Actual direct labor cost of $194,256 for a total of 11,360 hours Actual variable MOH $48,848 Actual fixed MOH $83,200 Print Done Pratt Awning manufactures standard cost system. The company allocates overhead based on the number of direct labor hours. The following are the companv's cost and standards data: Actual cost and operating data from the most recent month are as follows: (Click the icon to view the actual results.) Click the icon to view the standards.) allocated on the basis of direct labor hours All manufacturing overhead Read the requirements. one awning. Requirement 1. Calculate the standard cost Standard cost Standard cost per unit Direct materials Direct labor Variable MOH Fixed MOH Total standard cost (Enter the Requirement 2a. Calculat favorable (F) or unfavorable (U). Abbreviations used: DM Direct materials.) direct material varianc s as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variance as First determine the formula for the price variance, then compute the price variance for direct materials. DM price variance x Determine the formula for the quantity variance, then compute the quantity variance for direct materials DM quantity variance = Requirement 2b. Calculate the direct labor variances. (Enter the variances favorable (F) or unfavorable (U). Abbreviations used: DL s positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variance as Direct labor.) First determine the formula r the rate variance, then compute the rate variance for direct labor. DL rate variance x ( First determine the formula for the efficiency variance, then compute the efficiency variance for direct labor. x( DL efficiency variance X I Requirement 2c. Calculate the variable manufacturing overhead variances. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U).k First determine the formula for the rate variance, then compute the rate variance for variable manufacturing overhead. (Round interim calculations to the nearest cent.) Variable overhead x( rate variance Now compute the variable manufacturing overhead efficiency variance. First determine the formula for the efficiency variance, then compute the efficiency variance for variable manufacturing overhead. Variable overhead x efficiency variance Requirement 2d. Calculate the fixed manufacturing overhead variances. (Enter the variance as a positive number. Label the variance as favorable (F) or unfavorable (U).) Begin by computing the fixed manufacturing overhead budget variance. First determine the formula for the budget variance, then compute the budget variance for fixed manufacturing overhead. Fixed MOH budget variance Now compute the fixed manufacturing overhead volume variance. First determine the formula for the volume variance, then compute the volume variance for fixed manufacturing overhead Fixed MOH =volume variance Variable manufacturing overhead: Meaning Possible explanation Variance VOH rate VOH efficiency Fixed manufacturing overhead: Possible explanation Variance Meaning FOH budget FOH volume Are any of the variances likely to be interrelated? . This may have resulted in variance. It is likely that Pratt Awning variance The likely to be related to the
