Question

Ceramics Etc is a manufacturer of large flower pots for urban settings. The company has these​ standards:

Direct materials (resin). . . . . . . . . . . . . . . . . . . .	13 pounds per pot at a cost of $3.00
	per pound
Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . . .	2.0 hours at a cost of $21.00 per hour
Standard variable manufacturing
overhead rate. . . . . . . . . . . . . . . . . . . . . .	$4.00 per direct labor hour
Budgeted fixed manufacturing overhead. . . . . . . .	$15,000
Standard fixed MOH rate. . . . . . . . . . . . . . . . .	$6.00 per direct labor hour (DLH)

Ceramics Etc.Ceramics Etc.

allocated fixed manufacturing overhead to production based on standard direct labor hours. Last​ month, the company reported the following actual results for the production of

1,500

flower​ pots:

Direct materials. . . . . . . . . . . . . . . . . . . . .	Purchased 21,250 pounds at a cost of
	$3.50 per pound; Used 20,550 pounds to
	produce 1,500 pots
Direct labor. . . . . . . . . . . . . . . . . . . . . . . .	Worked 2.4 hours per flower pot (3,600
	total DLH) at a cost of $19.00 per hour
Actual variable manufacturing overhead. . . .	$4.20 per direct labor hour for total
	actual variable manufacturing overhead
	of $15,120
Actual fixed manufacturing overhead. . . . . .	$14,400
Standard fixed manufacturing overhead
allocated based on actual production. . . . . .	$18,000

PrintDone

Requirements

1. Compute the variable manufacturing overhead variances. What do each of these variances tell​ management?

2. Compute the fixed manufacturing overhead variances. What do each of these variances tell​ management?

Answer 1

C od Woun Ssland and cast at 1500 pots.. Counds Quantity Rute 13 Liaz Direct Material - Armount last 1 39 Direct Labour Hour Rute 12M Amount freely 142 overhead Rate Quantity pete Amoutheast 4 28 Fired Manufacturing overhead guntidy Std. Fined MOH Rute 6 , Ruke, a 15,000 Amandhar Arout- Direct Material Direct kohou overhead Fired Mon Rute 39 42 8 quantity troo 1 yo Woo Direct mutual Total std cost computation Particulars quandity Amende Direct Meterid 39 A 1500 585od Direct Labour 42 sos overhead 1500 ooo Fired Mon 18000 151,500 می 12

Page No. Actual Production Cort et 1500 bats. Roantidy Particulars Direct material Diret Labour overhead Fired Mon Rufe 3.50 19.vn 4.2 3ooo Amand- 70878 68400 15 120 149.0 168798 3600 Variane Actuato varingle Particulars Direct Labour Direct Material ourhund fined mon computation Adveuse le Standardit 63,000 68.400 - 5400 58,800 H70,878 -12375 12,000 15,120 - 3120 18,000 14,400 ml + 3600 - 17290 The adverse variance af. 8 17,295 to be charged to Pratt & Lass Account is