Question

R Hopkins is a cost accountant and business analyst for Dashing Design Company (DOC), which manufactures expensive brass doorknoba DOC es two direct cost categories: direct materials and direct manufacturing labor that manufacturing overhead is most closely related to ma n age. Therefore, w e manufacturing overhead to production based upon pounds of materials used Click the boon to view the standards) then to view the i ) 0 Data Table Read the remonts indicating whether ache ter until (U) Requirement 1. For the month of Art compute the Before coming the ones the Al the beginning of 2017, DOC bu und gehen and y production of 410 000 d b breath door Cost Door 03. 11. hos 1hour 22.00 Actual Costs incurred Direct materials (brass) De manufacturing bor Manufacturing overhead Variable Purchase 3703 Direct $1003 Standard cost perdone for Art 2017 33.000 doorknobs But Production Director purchased D Direct manding to 7.00 20.00 hours for $10.00 16400 moved

Answer 1

Requirement 1:

		Actual Input Qty. x Budgeted Price
	Actual Costs Incurred	Purchases	Usage	Flexible Budget
Direct materials	$154,800	$141,900	$82,500	$108,900

Actual Costs Incurred = Actual qty. purchased x Actual price = 12,900 lbs x $ 12 = $ 154,800

Actual quantity purchased x Budgeted price = 12,900 lbs x $ 11 = $ 141,900

Actual quantity usage x Budgeted price = 7,500 lbs x $ 11 = $ 82,500

Flexible Budget = Budgeted quantity x Budgeted price = 33,000 x 0.3 lbs x $ 11 = $ 108,900

a.

Direct material price variance based on purchases = $ 154,800 - $ 141,900 = $ 12,900 U

b.

Direct material efficiency variance = $ 141,900 - $ 108,900 = $ 33,000 U

	Actual Costs Incurred	Actual Input Qty. x Budgeted Price	Flexible Budget
Direct manuf. Labor	$619,500	$560,500	$752,400

Actual Labor Costs Incurred = $ 619,500

Actual Input Qty. x Budgeted Price = 29,500 x $ 19 = $ 560,500
Flexible Budget = Budgeted labor hours x Budgeted Rate = 33,000 x 1.2 Hrs x $ 19 = $ 752,400

c.

Direct manufacturing labor price variance = $ 619,500 - $ 560,500 = $ 59,000 U

d.

Direct manufacturing labor efficiency variance = $ 560,500 - $ 752,400 = $ (191,900) F