The Russo Company uses a flexible budget and standard costs to aid planning and control of its machining manufacturing operations. Its costing system for manufacturing has two direct-cost categories (direct materials and direct manufacturing labor-both variable) and two overhead-cost categories (variable manufacturing overhead and fixed manufacturing overhead, both allocated using direct manufacturing labor-hours). The following actual results are for August:

Some additional information about Russo Company's budget, standard costs and labor follows:

Describe how Russo's control of variable manufacturing overhead items differs from its control of fixed manufacturing overhead items.

The control of variable manufacturing overhead requires(long-term planning or the identification of costs). Individual variable manufacturing overhead items are (not usually or usually) affected very much by day-to-day control. They are controlled(daily by the number of units produced and the inputs used in production or periodically through planning decisions and budgeting procedures). Individual fixed manufacturing overhead items are(not usually or usually) affected very much by day-to-day control. They are controlled(daily by the number of units produced and the inputs used in production or periodically through planning decisions and budgeting procedures).

A Data Table - X $ Direct materials price variance (based on purchases) Direct materials efficiency variance Direct manufacturing labor costs incurred Variable manufacturing overhead flexible-budget variance Variable manufacturing overhead efficiency variance Fixed manufacturing overhead incurred 178,200 F 770,500 U 451,000 10,500 U 18,300 U 558,420 - i More Info X At the 30,000 budgeted direct manufacturing labor-hour level for August, budgeted direct manufacturing labor is $600,000, budgeted variable manufacturing overhead is $300,000, and budgeted fixed manufacturing overhead is $600,000 The standard cost per pound of direct materials is $11.50. The standard allowance is 6 pounds of direct materials for each unit of product. During August, 20,000 units of product were produced. There was no beginning inventory of direct materials. There was no beginning or ending work in process. In August, the direct materials price variance was $1.10 per pound. In July, labor unrest caused a major slowdown in the pace of production, resulting in an unfavorable direct manufacturing labor efficiency variance of $ 155,000. There was no direct manufacturing labor price variance. Labor unrest persisted into August. Some workers quit. Their replacements had to be hired at higher wage rates, which had to be extended to all workers. The actual average wage rate in August exceeded the standard average wage rate by $0.50 per hour. Requirement 1. Compute the listed amounts for August. Determine the formula, then complete the computation for each. (Abbreviations used: DM = Direct materials, mfg. = manufacturing, OH = Overhead.) a. Total pounds of direct materials purchased. Pounds of DM purchased b. Total number of pounds of excess direct materials used. Pounds of excess direct materials used = c. Variable manufacturing overhead spending variance. (Label the variance as favorable (F) or unfavorable (U).) Variable mfg. OH spending variance = d. Total number of actual direct manufacturing labor-hours used. Determine the formula, then complete the computation for each step below. Begin by computing the standard direct manufacturing labor rate. Standard direct mfg labor rate Now compute the total number of actual direct manufacturing labor-hours used. Actual direct mfg. labor-hours e. Total number of standard direct manufacturing labor-hours allowed for the units produced. Determine the formula, then complete the computation for each step below. Begin by computing the standard variable manufacturing overhead rate. Standard variable mfg. OH rate f. Production-volume variance. Determine the formula, then complete the computation for each step below. Begin by computing the budgeted fixed manufacturing overhead rate. Budgeted fixed mfg. OH rate Next, compute the fixed manufacturing overhead allocated. Fixed mfg OH allocated Now compute the production-volume variance. (Label the variance as favorable (F) or unfavorable (U).) Production-volume variance A Data Table - X $ Direct materials price variance (based on purchases) Direct materials efficiency variance Direct manufacturing labor costs incurred Variable manufacturing overhead flexible-budget variance Variable manufacturing overhead efficiency variance Fixed manufacturing overhead incurred 178,200 F 770,500 U 451,000 10,500 U 18,300 U 558,420 - i More Info X At the 30,000 budgeted direct manufacturing labor-hour level for August, budgeted direct manufacturing labor is $600,000, budgeted variable manufacturing overhead is $300,000, and budgeted fixed manufacturing overhead is $600,000 The standard cost per pound of direct materials is $11.50. The standard allowance is 6 pounds of direct materials for each unit of product. During August, 20,000 units of product were produced. There was no beginning inventory of direct materials. There was no beginning or ending work in process. In August, the direct materials price variance was $1.10 per pound. In July, labor unrest caused a major slowdown in the pace of production, resulting in an unfavorable direct manufacturing labor efficiency variance of $ 155,000. There was no direct manufacturing labor price variance. Labor unrest persisted into August. Some workers quit. Their replacements had to be hired at higher wage rates, which had to be extended to all workers. The actual average wage rate in August exceeded the standard average wage rate by $0.50 per hour. Requirement 1. Compute the listed amounts for August. Determine the formula, then complete the computation for each. (Abbreviations used: DM = Direct materials, mfg. = manufacturing, OH = Overhead.) a. Total pounds of direct materials purchased. Pounds of DM purchased b. Total number of pounds of excess direct materials used. Pounds of excess direct materials used = c. Variable manufacturing overhead spending variance. (Label the variance as favorable (F) or unfavorable (U).) Variable mfg. OH spending variance = d. Total number of actual direct manufacturing labor-hours used. Determine the formula, then complete the computation for each step below. Begin by computing the standard direct manufacturing labor rate. Standard direct mfg labor rate Now compute the total number of actual direct manufacturing labor-hours used. Actual direct mfg. labor-hours e. Total number of standard direct manufacturing labor-hours allowed for the units produced. Determine the formula, then complete the computation for each step below. Begin by computing the standard variable manufacturing overhead rate. Standard variable mfg. OH rate f. Production-volume variance. Determine the formula, then complete the computation for each step below. Begin by computing the budgeted fixed manufacturing overhead rate. Budgeted fixed mfg. OH rate Next, compute the fixed manufacturing overhead allocated. Fixed mfg OH allocated Now compute the production-volume variance. (Label the variance as favorable (F) or unfavorable (U).) Production-volume variance