Dawson, Inc., is a privately held furniture manufacturer. For August 2017, Dawson had the following standards for one of its products, a wicker chair: -- Standards per Chair -- Direct materials 3 square yards of input at $5.50 per square yard Direct manufacturing labor 0.5 hour of input at $10.50 per hour The following data were compiled regarding actual performance: actual output units (chairs) produced, 2,200; square yards of input purchased and used, 6,200; price per square yard, $5.70; direct manufacturing labor costs, $9,844; actual hours of input, 920; labor price per hour, $10.70. Q. Show computations of price and efficiency variances for direct materials and direct manufacturing labor. Give a plausible explanation of why each variance occurred.
Dawson, Inc., is a privately held furniture manufacturer. For August 2017, Dawson had the following standards for one of its products, a wicker chair:
-- Standards per Chair --
Direct materials 3 square yards of input at $5.50 per square yard
Direct manufacturing labor 0.5 hour of input at $10.50 per hour
The following data were compiled regarding actual performance: actual output units (chairs) produced, 2,200; square yards of input purchased and used, 6,200; price per square yard, $5.70; direct
Q. Show computations of price and efficiency variances for direct materials and direct manufacturing labor. Give a plausible explanation of why each variance occurred.
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