Pickul Awning manufactures awnings and uses a standard cost system. The company allocates overhead based on the number direct labor hours. The following are thecompany's cost and standards data:(Click the icon to view the standards.)Requirement 2c. Calculate the variable manufacturing overhead variances. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U).)First determine the formula for the rate variance, then compute the rate variance for variable manufacturing overhead. (Round interim calculations to the nearest cent.)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 overheadefficiency varianceRequirement 2d. Calculate the fixed manufacturing overhead variances. (Enter the variance a positive number. Label the variance as favorable (F) or unfavorable (U).)Begin by computing the fixed manufacturing overhead budget variance. First determine the formula for the budget variance, then compute the budget variance for fixed manufacturing overhead.VarianceDM priceDM quantityDirect Labor:Variable overheadrate variancex(Now compute the fixed manufacturing overhead volume variance. First determine the formula for the volume variance, then compute the volume variance for fixed manufacturing overhead.Fixed MOHvolume varianceRequirement 3. Explain what each of the variances you calculated means and give at least one possible explanation for each of those variances.Direct materials:VarianceDL rateDL efficiencvMeaningMeaningActual cost and operating data from the most recent month are as follows:(Click the icon to view the actual results.)All manufacturing overhead is allocated on the basis of direct labor hours.Read the requirements.Fixed MOHbudget variancePossible explanationPossible explanation Pickul Awning manufactures awnings and uses a standard cost system. The company allocates overhead based on the number of direct labor hours. The following are thecompany's cost and standards data:(Click the icon to view the standards.)Requirement 1. Calculate the standard cost of one awning.Standard costDirect materialsDirect laborVariable MOHFixed MOHTotal standard costStandard cost per unitRequirement 2a. Calculate the direct material variances. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variance as faFirst determine the formula for the price variance, then compute the price variance for direct materials.Determine the formula for the quantity variance, then compute the quantity variance for direct materials.= DM price variance) =First determine the formula for the efficiency variance, then compute the efficiency variance for direct labor.x(x(x (x(= DM quantity variance=Requirement 2b. Calculate the direct labor variances. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variance as favFirst determine the formula for the rate variance, then compute the rate variance for direct labor.== DL efficiency variance=DL rate varianceActual cost and operating data from the most recent month are as follows:(Click the icon to view the actual results.)All manufacturing overhead is allocated on the basis of direct labor hours.Read the requirements.) =Variable overheadrate varianceActual ResultsPurchased 52,080 yards at a total cost of $661,416Used 47,000 yards in producing 2,400 awningsActual direct labor cost of $105,006 for a total of 9,460 hoursActual variable MOH $43,516Actual fixed MOH $70,200PrintRequirement 2c. Calculate the variable manufacturing overhead variances. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U).)First determine the formula for the rate variance, then compute the rate variance for variable manufacturing overhead. (Round interim calculations to the nearest cent.)Standard Price and VolumeDoneStandards:Direct materials 20.0 yards per awning at $13.00 per yardDirect labor 4.0 hours per awning at $11.00 per hourVariable MOH standard rate $4.00 per direct labor hourPredetermined fixed MOH standard rate $7.00 per direct labor hourTotal budgeted fixed MOH cost $64,700PrintDoneX

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Requirement 1. Calculate the standard cost of one awning. Standard cost Direct materials Direct labor Variable MOH Fixed MOH Total standard cost Standard cost per unit Requirement 2a. Calculate the direct material variances. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variance as fa First determine the formula for the price variance, then compute the price variance for direct materials. Determine the formula for the quantity variance, then compute the quantity variance for direct materials. DM price variance DM quantity variance All manufacturing overhead is allocated on the basis of direct labor hours. Read the requirements Requirement 2b. Calculate the direct labor variances. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variance as fav First determine the formula for the rate variance, then compute the rate variance for direct labor ) DL rate variance Actual Results Purchased 52,080 yards at a total cost of 5661,416 Used 47,000 yards in producing 2,400 awnings Actual direct labor cost of $105,006 for a total of 9,460 hours. Actual variable MOH $43,516 Actual fixed MOH $70.200 Print Done Standard Price and Volume Standards: Direct materials 20.0 yards per awning at $13.00 per yard Direct labor 4.0 hours per awning at $11.00 per hour Variable MOH standard rate $4.00 per direct labor hour Predetermined fixed MOH standard rate $7.00 per direct labor hour Total budgeted fixed MOH cost $64,700

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q