The _(U/F)___ variable manufacturing overhead (MOH) rate variance tells managers that __(direct materials, direct labor hours, actual manufacturing overhead cost, direct labor costs )__ were _(higher or lower)__ than expected. The _(U/F)___variable MOH efficiency variance tells managers that actual _(direct materials, direct labor hours, manufacturing overhead)_were_(higher or lower)__ than ___(budget direct material cost, budget manufacturing overhead cost, standard hours allowed).
Grand Display is a manufacturer of large flower pots for urban settings. The company has these standards: B (Click the icon to view the standards.) (Click the icon to view the actual results.) Requirements 1. Compute the variable manufacturing overhead variances. What do each of these variances tell management? 2. Compute the fixed manufacturing overhead variances. What do each of these variances tell management? ..... Begin by computing the variable manufacturing overhead rate variance. First determine the formula for the rate variance, then compute the rate variance for variable manufacturing overhead. Variable overhead Actual hours Standard rate Actual rate rate variance x( * ( 4,750 $ 2.00 $ 2.70 ) $ 3,325 U 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 Standard rate Standard hours allowed Actual hours ) - x( x( efficiency variance $ 1,900 U $ 2.00 3,800 4,750 What do each of these variances tell management? Grand Display is a manufacturer of large flower pots for urban settings. The company has these standards: (Click the icon to view the standards.) (Click the icon to view the actual results.) Requirements Actual results Standard price and volume 14 pounds per pot at a cost of $6.00 per pound Direct materials (resin). Direct labor.. 2.0 hours at a cost of $22.00 per hour Grand Display allocated fixed manufacturing overhead to production based on standard direct labor hours. Last month, the company reported the following actual results for the production of 1,900 flower pots: Purchased 28,150 pounds at a cost of $6.40 per pound; Direct materials used 27,550 pounds to produce 1,900 pots Worked 2.5 hours per flower pot (4,750 total DLH) at a Direct labor cost of $18.00 per hour Actual variable manufacturing $2.70 per direct labor hour for total actual variable overhead manufacturing overhead of $12,825 Actual fixed manufacturing overhead $29,600 Standard fixed manufacturing overhead allocated based on actual production .. $34,200 .... $2.00 per direct labor hour Standard variable manufacturing overhead rate Budgeted fixed manufacturing overhead $30,200 Standard fixed MOH rate $9.00 per direct labor hour (DLH)
