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Using the data below, answer the questions about the Direct Materials Cost (DMC) variances and the Direct Labor Cost (DLC) variances. i. Who is responsible for the favorable DMC variance of $204,000? ii. What are the two likely causes for the favorable DMC of $204,000? iii. Who is responsible for the unfavorable DMC variance of $100,000? iv. What are the two likely causes for the unfavorable DMC of $100,000? v. What are the two likely causes for the favorable DLC variance of $153,000? vi. What are the two likely causes for the unfavorable DLC variance of $72,000? Flexible Sales Master Budget Flexible Volume (Static) Actual Variance F/U Budget Variance F/U Budget Sales volume (units) 51,000 51,000 4,000 F 47,000 Sales revenue $ 3,315,000 $ 357,000 $ 3,672,000 $ 288,000 $ 3,384,000 U F Variable costs: Direct materials cost 1,071,000 204,000 F 1,275,000 100,000 U 1,175,000 Direct labor cost 765,000 153,000 F 918,000 72,000 U 846,000 Overhead cost - variable 510,000 102,000 U 408,000 153,000 32,000 U 376,000 Selling, General Admin costs - variable Total variable costs 204,000 2,550,000 141,000 2,538,000 51,000 U 12,000 204,000 F 2,754,000 216,000 U Contribution margin 765,000 153,000 U 918,000 72,000 846,000 Ciuad se.

Using the data below, answer the questions about the Direct Materials Cost (DMC) variances and the Direct Labor Cost (DLC) variances. i. Who is responsible for the favorable DMC variance of $204,000? ii. What are the two likely causes for the favorable DMC of $204,000? iii. Who is responsible for the unfavorable DMC variance of $100,000? iv. What are the two likely causes for the unfavorable DMC of $100,000? v. What are the two likely causes for the favorable DLC variance of $153,000? vi. What are the two likely causes for the unfavorable DLC variance of $72,000? Flexible Sales Master Budget Flexible Volume (Static) Actual Variance F/U Budget Variance F/U Budget Sales volume (units) 51,000 51,000 4,000 F 47,000 Sales revenue $ 3,315,000 $ 357,000 $ 3,672,000 $ 288,000 $ 3,384,000 U F Variable costs: Direct materials cost 1,071,000 204,000 F 1,275,000 100,000 U 1,175,000 Direct labor cost 765,000 153,000 F 918,000 72,000 U 846,000 Overhead cost - variable 510,000 102,000 U 408,000 153,000 32,000 U 376,000 Selling, General Admin costs - variable Total variable costs 204,000 2,550,000 141,000 2,538,000 51,000 U 12,000 204,000 F 2,754,000 216,000 U Contribution margin 765,000 153,000 U 918,000 72,000 846,000 Ciuad se.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please answer the following questions using this chart. 

Using the data below, answer the questions about the Direct Materials Cost (DMC) variances and the Direct Labor Cost (DLC) variances. i. Who is responsible for the favorable DMC variance of $204,000? ii. What are the two likely causes for the favorable DMC of $204,000? iii. Who is responsible for the unfavorable DMC variance of $100,000? iv. What are the two likely causes for the unfavorable DMC of $100,000? v. What are the two likely causes for the favorable DLC variance of $153,000? vi. What are the two likely causes for the unfavorable DLC variance of $72,000? Flexible Sales Master Budget Flexible Volume (Static) Actual Variance F/U Budget Variance F/U Budget Sales volume (units) 51,000 51,000 4,000 47,000 Sales revenue $ 3,315,000 $ 357,000 U $ 3,672,000 $ 288,000 $ 3,384,000 F Variable costs: Direct materials cost 1,071,000 204,000 1,275,000 100,000 1,175,000 Direct labor cost 765,000 153,000 F 918,000 72,000 846,000 Overhead cost - variable 510,000 102,000 408,000 32,000 376,000 Selling, General Admin costs - variable 204,000 2,550,000 51,000 204,000 153,000 2,754,000 12,000 216,000 141,000 2,538,000 Total variable costs F U Contribution margin 765,000 153,000 U 918,000 72,000 846,000 Fixed costs:
Transcribed Image Text:Using the data below, answer the questions about the Direct Materials Cost (DMC) variances and the Direct Labor Cost (DLC) variances. i. Who is responsible for the favorable DMC variance of $204,000? ii. What are the two likely causes for the favorable DMC of $204,000? iii. Who is responsible for the unfavorable DMC variance of $100,000? iv. What are the two likely causes for the unfavorable DMC of $100,000? v. What are the two likely causes for the favorable DLC variance of $153,000? vi. What are the two likely causes for the unfavorable DLC variance of $72,000? Flexible Sales Master Budget Flexible Volume (Static) Actual Variance F/U Budget Variance F/U Budget Sales volume (units) 51,000 51,000 4,000 47,000 Sales revenue $ 3,315,000 $ 357,000 U $ 3,672,000 $ 288,000 $ 3,384,000 F Variable costs: Direct materials cost 1,071,000 204,000 1,275,000 100,000 1,175,000 Direct labor cost 765,000 153,000 F 918,000 72,000 846,000 Overhead cost - variable 510,000 102,000 408,000 32,000 376,000 Selling, General Admin costs - variable 204,000 2,550,000 51,000 204,000 153,000 2,754,000 12,000 216,000 141,000 2,538,000 Total variable costs F U Contribution margin 765,000 153,000 U 918,000 72,000 846,000 Fixed costs:
TII. VVNO IS responsibiIe for the uniavorabie DMC vanance of pT00,000 ? iv. What are the two likely causes for the unfavorable DMC of $100,000? v. What are the two likely causes for the favorable DLC variance of $153,000? vi. What are the two likely causes for the unfavorable DLC variance of $72,000? Flexible Sales Master Budget Flexible Volume (Static) Actual Variance F/U Budget Variance F/U Budget Sales volume (units) 51,000 51,000 4,000 47,000 Sales revenue $ 3,315,000 $ 357,000 U $ 3,672,000 $ 288,000 $ 3,384,000 F Variable costs: Direct materials cost 1,071,000 204,000 F 1,275,000 100,000 1,175,000 Direct labor cost 765,000 153,000 F 918,000 72,000 846,000 Overhead cost - variable 102,000 408,000 510,000 204,000 2,550,000 32,000 376,000 153,000 2,754,000 Selling, General Admin costs - variable 51,000 U 12,000 216,000 141,000 2,538,000 Total variable costs 204,000 Contribution margin 765,000 153,000 U 918,000 72,000 F 846,000 Fixed costs: Overhead cost - fixed 114,000 6,400 F 120,400 120,400 Selling, General Admin costs - fixed 69,000 2,000 4,400 U 67,000 187,400 67,000 187,400 Total fixed costs 183,000 Net operating income $ 582,000 $ 148,600 U $ 730,600 $ 72,000 $ 658,600 ככככ כ
Transcribed Image Text:TII. VVNO IS responsibiIe for the uniavorabie DMC vanance of pT00,000 ? iv. What are the two likely causes for the unfavorable DMC of $100,000? v. What are the two likely causes for the favorable DLC variance of $153,000? vi. What are the two likely causes for the unfavorable DLC variance of $72,000? Flexible Sales Master Budget Flexible Volume (Static) Actual Variance F/U Budget Variance F/U Budget Sales volume (units) 51,000 51,000 4,000 47,000 Sales revenue $ 3,315,000 $ 357,000 U $ 3,672,000 $ 288,000 $ 3,384,000 F Variable costs: Direct materials cost 1,071,000 204,000 F 1,275,000 100,000 1,175,000 Direct labor cost 765,000 153,000 F 918,000 72,000 846,000 Overhead cost - variable 102,000 408,000 510,000 204,000 2,550,000 32,000 376,000 153,000 2,754,000 Selling, General Admin costs - variable 51,000 U 12,000 216,000 141,000 2,538,000 Total variable costs 204,000 Contribution margin 765,000 153,000 U 918,000 72,000 F 846,000 Fixed costs: Overhead cost - fixed 114,000 6,400 F 120,400 120,400 Selling, General Admin costs - fixed 69,000 2,000 4,400 U 67,000 187,400 67,000 187,400 Total fixed costs 183,000 Net operating income $ 582,000 $ 148,600 U $ 730,600 $ 72,000 $ 658,600 ככככ כ
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