Refer to the Elegant Designs data set. Elegant Designs is a manufacturer of large flower pots for
Question:
Elegant Designs is a manufacturer of large flower pots for urban settings. The company has these standards:
Elegant Designs allocates fixed manufacturing overhead to production based on standard direct labor hours. Last month, Elegant Designs reported the following actual results for the production of 1,600 flower pots:
Requirements
1. Compute the direct labor rate variance and the direct labor efficiency variance.
2. What is the total variance for direct labor?
3. Who is generally responsible for each variance?
4. Interpret the variances.
Transcribed Image Text:
10 pounds per pot at a cost of $3.00 per pound 5.0 hours at a cost of $19.00 per hour $3.00 per direct labor hour Direct materials (resin) Direct labor Standard variable manufacturing overhead rate Budgeted fixed manufacturing overhead Standard fixed MOH rate $94,000 $12.00 per direct labor hour (DLH) Purchased 17,820 pounds at a cost of $3.50 per pound; used 17,120 pounds to produce 1,600 pots Worked 5.5 hours per unit (8,800 total DLH) at a cost of $18.00 per hour $3.20 per direct labor hour for total actual variable manufacturing overhead of $28,160 Direct materials Direct labor Actual variable manufacturing overhead Actual fixed manufacturing overhead. Standard fixed manufacturing overhead allocated based on actual production .. $93,500 .............. $96,000
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