Verona Statuary manufactures bust statues of famous historical figures. All statues are the same size. Each unit requires the same amount of resources. The following information is from the static budget for 2017: Expected production and sales 6,500 units Expected selling price per unit $745 Total fixed costs $1,350,000 Standard Quantity Standard Price Standard Unit Cost Direct materials 14 pounds $12 per pound $168 Direct manufacturing labor 3.1 hours $40 per hour $124 During 2017, actual number of units produced and sold was 4,800, at an average selling price of $760. Actual cost of direct materials used was $813,750, based on 62,500 pounds purchased at $13.02 per pound. Direct manufacturing labor-hours actually used were 17,500, at the rate of $33.48 per hour. As a result, actual direct manufacturing labor costs were $585,900. Actual fixed costs were $1,150,000. There were no beginning or ending inventories 1. Calculate the sales-volume variance and flexible-budget variance for operating income. 2. Compute price and efficiency variances for direct materials and direct manufacturing labor.
Verona Statuary manufactures bust statues of famous historical figures. All statues are the same size. Each unit requires the same amount of resources. The following information is from the static budget for 2017:
Expected production and sales 6,500 units
Expected selling price per unit $745
Total fixed costs $1,350,000
|
Standard Quantity |
Standard Price |
Standard Unit Cost |
|
|
Direct materials |
14 pounds |
$12 per pound |
$168 |
|
Direct manufacturing labor |
3.1 hours |
$40 per hour |
$124 |
During 2017, actual number of units produced and sold was 4,800, at an average selling price of $760. Actual cost of direct materials used was $813,750, based on 62,500 pounds purchased at $13.02 per pound. Direct manufacturing labor-hours actually used were 17,500, at the rate of $33.48 per hour. As a result, actual direct
|
1. |
Calculate the sales-volume variance and flexible- |
|
2. |
Compute price and efficiency variances for direct materials and direct manufacturing labor. |
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