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The managers of Monachino, a contract manufacturer of DVD drives, are seeking explanations for the variances in the following report (Click on the icon to

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The managers of Monachino, a contract manufacturer of DVD drives, are seeking explanations for the variances in the following report (Click on the icon to view the report.) Explain the meaning of each of Monachino's materials, labour, and overhead variances. Materials The occurred because Monachino paid than the standard price for raw materials. The occurred because Monachino actually used direct materials than the standard quantity of materials allowed for the year's actual output. These results suggest that Monachino bought -quality raw materials than originally budgeted. Data Table Monachino Co. Standard Cost Income Statement Year Ended December 31 $ 1,200,000 710,000 $ 7,000 F Sales revenue Cost of goods sold at standard cost Manufacturing cost variances: Direct materials price variance Direct materials efficiency variance Direct labour price variance Direct labour efficiency variance Manufacturing overhead flexible budget variance 33,000 U 10,000 U 24,000 F 26,000 U 7,000 F Production volume variance 31,000 741,000 Total manufacturing variances Cost of goods sold at actual cost Gross profit Marketing and administrative expenses 459,000 424,000 $ 35,000 Operating income Print Done Done

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