Having trouble with e, f, and g of number 2. 8-39 Review of Chapters 7 and 8, 3-

Question

Having trouble with e, f, and g of number 2.

8-39 Review of Chapters 7 and 8, 3-variance analysis. {CPA, adapted) The Brown Manufacturing Company?s costing system has two direct-cost categories: direct materials and direct manufacturing labor. Manufacturing overhead (both variable and fixed is allocated to products on the basis of standard direct manufacturing labor-hours {DLH}. At the beginning of 2014, Beal adapted the following standards for its manufacturing costs: Standard manufacturing cost per output unit $152.00 The denominator level for total manufacturing overhead per month in 2014 is 37,000 direct manufacturing labor-hours. Bears flexible budget for January 2014 was based on this denominator level. The records for January indicated the fallowing 1. Prepare a schedule of total standard manufacturing costs for the 7,600 output units in January 2014. 2. Far the month of January 2014, compute the following variances, indicating whether each is favorable (F) or unfavorable (U): a. Direct materials price variance, based on purchases b. Direct materials efficiency variance c. Direct manufacturing labor price variance d. Direct manufacturing labor efficiency variance e. Total manufacturing overhead spending variance f. Variable manufacturing overhead efficiency variance g. Production-volume variance

Explanation / Answer

Direct Material Price Variance ( Standard Price- Actual Price)* Actual Qty (4-3.8) *40300 $ 8060 Direct Material Efficiency Variance ( Standard Qty- Actual Qty)* Standard Price ( 7600*5-40300)4 (38000-40300)4 9200 Unfavourable

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