Milan Statuary manufactures bust statues of famous historical figures. All statues are the same size. Each...

 

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Milan 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 Expected selling price per unit Total fixed costs 6,100 units $ 700 $1,350,000 Standard quantities, standard prices, and standard unit costs follow for direct materials and direct manufacturing labor: Standard Quantity Direct materials 16 pounds Direct manufacturing labor 3.8 hours Standard Price $14 per pound $ 30 per hour Standard Unit Cost $224 $114 During 2017, actual number of units produced and sold was 5,100, at an average selling price of $730. Actual cost of direct materials used was $1,149,400, based on 70,000 pounds purchased at $16.42 per pound. Direct manufacturing labor-hours actually used were 17,000, at the rate of $33.70 per hour. As a result, actual direct manufacturing labor costs were $572,900. Actual fixed costs were $1,200,000. There were no beginning or ending inventories. Required: 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. Milan 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 Expected selling price per unit Total fixed costs 6,100 units $ 700 $1,350,000 Standard quantities, standard prices, and standard unit costs follow for direct materials and direct manufacturing labor: Standard Quantity Direct materials 16 pounds Direct manufacturing labor 3.8 hours Standard Price $14 per pound $ 30 per hour Standard Unit Cost $224 $114 During 2017, actual number of units produced and sold was 5,100, at an average selling price of $730. Actual cost of direct materials used was $1,149,400, based on 70,000 pounds purchased at $16.42 per pound. Direct manufacturing labor-hours actually used were 17,000, at the rate of $33.70 per hour. As a result, actual direct manufacturing labor costs were $572,900. Actual fixed costs were $1,200,000. There were no beginning or ending inventories. Required: 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.

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SalesVolume Variance and FlexibleBudget Variance for Operating Income Static budget operating income ... View the full answer