4 A B D E F G H 1 Computing standard cost variances and reporting to management 2 3 SoundSmart manufactures headphone cases. During September 2020, the company produced 108,000 cases and recorded the following cost data: Standard Cost Information 4 5 6 Quantity Cost 7 8 9 10 Direct Materials 2 parts $ 0.16 per part Direct Labor 0.02 hours 7.00 per hour Variable Manufacturing Overhead 0.02 hours 11.00 per hour Fixed Manufacturing Overhead ($29,400 for static budget volume of 98,000 units and 1,960 hours, or $15 per hour) 11 12 13 14 15 Actual Information 16 Direct Materials (193,000 parts @ $0.21 per part) (1,760 hours @ $7.15 per hour) 17 $ 40,530 12,584 12,000 18 Direct Labor Variable Manufacturing Overhead Fixed Manufacturing Overhead 19 30,000 20 21 22 23 Requirements 1. Compute the cost and efficiency variances for direct materials and direct labor. 2. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances. 3. SoundSmart's management used better quality materials during September. Discuss the trade-off between the two direct material variances. 24 25 26 27 28 29 30 31 32 33 34 35 36 37