Eric Williams is a cost accountant and business analyst for Diamond Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labor. Williams feels that manufacturing overhead is most closely related to material usage. Therefore, DDC allocates manufacturing overhead to production based upon pounds of materials used. (Click the icon to view the standards. (Click the icon to view the actual results for April.) Read the requirements. Requirement 1. For the month of April, compute the variances, indicating whether each is favorable (F) or unfavorable (U). Before computing the variances complete the tables below. Begin by completing the table for direct materials. Actual Input Qty. * Budgeted Price Direct materials Requirements Actual Costs Incurred Purchases Print Usage 1. For the month of April, compute the following variances, indicating whether each is favorable (F) or unfavorable (U). a. Direct materials price variance (based on purchases) Flexible Budget b. Direct materials efficiency variance c. Direct manufacturing labor price variance d. Direct manufacturing labor efficiency variance e. Variable manufacturing overhead spending varlance f. Variable manufacturing overhead efficiency variance Production-volume variance h. Fixed manufacturing overhead spending variance 2. Can Williams use any of the variances to help explain any of the other variances? Give examples. Done X Data table At the beginning of 2020, DDC budgeted annual production of 420.000 doorknobs and adopted the following standards for each doorknob: Input 0.3 lb. at $10/b 1.2 hours at $17/hour $5/b x 0.3 lb. $15/lb. x 0.3 lb. Direct materials (brass) Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Standard cost per doorknob Data table Actual results for April 2020 were as follows: Production Direct materials purchased Direct materials used Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Cost/Doorknob $ $ 29,000 doorknobs 12,400 lb. at $11/b. - X 8,500 lbs 29,200 hours for $671,600 $65,100 $158,000 3.00 20.40 1.50 4.50 29.40 X Check answer

Eric Williams is a cost accountant and business analyst for Diamond Design Company (DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct materials and direct manufacturing labor. Williams feels that manufacturing overhead is most closely related to material usage. Therefore, DDC allocates manufacturing overhead to production based upon pounds of materials used. (Click the icon to view the standards. (Click the icon to view the actual results for April.) Read the requirements. Requirement 1. For the month of April, compute the variances, indicating whether each is favorable (F) or unfavorable (U). Before computing the variances complete the tables below. Begin by completing the table for direct materials. Actual Input Qty. * Budgeted Price Direct materials Requirements Actual Costs Incurred Purchases Print Usage 1. For the month of April, compute the following variances, indicating whether each is favorable (F) or unfavorable (U). a. Direct materials price variance (based on purchases) Flexible Budget b. Direct materials efficiency variance c. Direct manufacturing labor price variance d. Direct manufacturing labor efficiency variance e. Variable manufacturing overhead spending varlance f. Variable manufacturing overhead efficiency variance Production-volume variance h. Fixed manufacturing overhead spending variance 2. Can Williams use any of the variances to help explain any of the other variances? Give examples. Done X Data table At the beginning of 2020, DDC budgeted annual production of 420.000 doorknobs and adopted the following standards for each doorknob: Input 0.3 lb. at $10/b 1.2 hours at $17/hour $5/b x 0.3 lb. $15/lb. x 0.3 lb. Direct materials (brass) Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Standard cost per doorknob Data table Actual results for April 2020 were as follows: Production Direct materials purchased Direct materials used Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Cost/Doorknob $ $ 29,000 doorknobs 12,400 lb. at $11/b. - X 8,500 lbs 29,200 hours for $671,600 $65,100 $158,000 3.00 20.40 1.50 4.50 29.40 X Check answer

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter18: Pricing And Profitability Analysis

Section: Chapter Questions

Problem 30P: San Mateo Optics, Inc., specializes in manufacturing lenses for large telescopes and cameras used in...

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