Theodore Company is engage in the business of seasonal tree-spraying and uses chemicals in its operations to prevent disease and bug-infestation. Employees received wages of $10 per hour, The direct manufacturing labor efficiency variance represents the difference between the actual time consumed in spraying a tree and the standard time allowed for the height of the tree (specified in feet), multiplied by the $10 standard hourly wage rate. For budgeting purposes, there is a standard allowance of one hour per customer for travel, setup. and clearup time. However, since several factors are uncontrollable by the employee, this one-hour budget allowance is excluded from the calculation of the direct manufacturing labor efficiency variance. Employees are responsible for keeping their own daily time-cards. m Chemical usage should vary directly with the tree-footage sprayed. Variable overhead includes costs that vary directly with the number of customers, as well as costs that vary according to tree-footage sprayed. Customers pay a service charged of $10 per visit and $1 per tree-foot sprayed. ofh es The standard static budget and actual results for June are as follows: Static Actual Budget 1,900 18,000 $ 19,900 2,700 Results (200 customers) (20,000 feet) 2,000 20,000 $ 22,000 4,000 Service calls (190 customers) Footage sprayed (18,000 feet) Total revenues (2,000 gallons) Chemicals (900 gallons) Direct manufacturing labor Travel, setup, clearup) (190 hours) Tree-spraying (900 hrs) (300 hours (800 hours) 1,900 3,000 9,000 8,000 Overhead: Variable based on number of 950 customers 1,800 2,000 4,750 18,350 1,550 Variable-based on footage Fixed 6,000 21,000 1,000 Total overhead Total cost S Gross profit before bonus Required: Compute the following for June: Direct materials price variance Direct materials usage (efficiency) variance Direct manufacturing labor travel, setup, and clearup variance 4 2 3. Direct manufacturing labor efficiency variance. Overhead spending (flexible budget) variance. 5