Static Budget (975 recliners) Actual Results (955 recliners) Sales (975 recliners x $510 each) (955 recliners x $490 each) $ 497,250 467,950 Variable Manufacturing Costs: Direct Materials (5,850 yds. @ $8.90/yd.) (5,987 yds. @ $8.70/yd.) 52,065 52,087 Direct Labor (9,750 DLHr @ $11.50/DLHr) 112,125 (9,350 DLHr @ $11.60/DLHr) 108,460 Variable Overhead (5,850 yds. @ $5.30 / yd.) 31,005 (5,987 yds. @ $6.70/yd.) 40,113 Fixed Manufacturing Costs: Fixed Overhead Total Cost of Goods Sold 60,255 62,255 255,450 262,915 241,800 $ 205,035 Gross Profit 1. 2. 3. Prepare a flexible budget based on the actual number of recliners sold. Compute the cost variance and the efficiency variance for direct materials and for direct labor. For manufacturing overhead, compute the variable overhead cost, variable overhead efficiency, fixed overhead cost, and fixed overhead volume variances. Round to the nearest dollar. Have Rouse's managers done a good job or a poor job controlling materials, labor, and overhead costs? Why? Describe how Rouse's managers can benefit from the standard costing system. (Recliners 4. nue Th Rouse Recliners manufactures leather recliners and uses flexible budgeting and a standard cost system. Rouse allocate= report includes the following selected data: (Click the icon to view the selected data.) Read the requirements. Rouse Recliners Flexible Budget Budget Amounts per Unit Actual Units (Recliners) Sales Revenue Variable Manufacturing Costs: Direct Materials Direct Labor Variable Overhead Fixed Manufacturing Costs: Fixed Overhead Total Cost of Goods Sold Gross Profit 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). (Round your answers to the nearest whole dollar. Abbreviations used: AC = actual cost, AQ= actual quantity, FOH = fixed overhead, SC standard cost, SQ standard quantity.) Direct materials cost variance Direct labor cost variance Formula Variance Next compute the efficiency variances. Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify w unfavorable (U). (Round your answers to the nearest whole dollar. Abbreviations used: AC actual cost; AQ= actual quantity: FOH fixed overhead: S Direct materials efficiency variance Direct labor efficiency variance Formula Variance ch variance is favorable (F) or and cost: SQ standard quantity.) Now compute the variable overhead cost and efficiency variances. Select the required formulas, compute the variable overhead cost and efficiency varid identify whether each variance is favorable (F) or unfavorable (U). (Round your answers to the nearest whole dollar. Abbreviations used: AC actual cost; AQ actual quantity, FOH flead: SC standard cost SQ standard quantity, VOH variable overhead.) VOH cost vanance Formula Variance Infficiency variance mpute the foxed overhead cost and volume variances. Select the required formulas, compute the fixed overhead cost and volume variances, and uniofy whether each variance is (F) or unfavorable (U). (Round your answers to the nearest whole dollar. Abbreviations used: AC actual cost; AQ actual quantity, FOH fixed overhead, SC standard cost; SQ- antity) overhead; SC standard cost, SQ 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). (Round your answers to the nearest whole dollar. Abbreviations used: AC actual cost; AQ actual quantity, FO standard quantity.) FOH cost variance Formula Variance FOH volume variance Requirement 3. Have Rouse's managers done a good job or a poor job controlling materials, labor, and overhead costs? Why? The variances computed in Requirement 2 suggest that the managers have done a job controlling materials and labor costs. The direct labor cost variance and direct materials efficiency variance. Managers have done a of the overhead variances are labor efficiency variance help offset the evidenced by the fact that Requirement 4. Describe how Rouse's managers can benefit from the standard costing system. Standard costing helps managers do the following: direct materials cost variance and dire job controlling overhead costs as Next