Henry Company produces bird houses and has determined the following direct cost categories and budgeted amounts:...

 

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Henry Company produces bird houses and has determined the following direct cost categories and budgeted amounts: Standard InputsStandard Cost per input $7.50 9.00 3.00 Category Direct Materials for 1 unit output 1.00 Direct Labour 0.30 Direct Marketing 0.50 Actual performance for the company is shown below: Actual output: (in units) Direct Materials: Materials costs 4.000 30,225 3,900 Input purchased and used Actual price per input Direct Manufacturing Labour: Labour costs $7.75 S11,470 1,240 $9.25 Labour-hours of input Actual price per hour Direct Marketing Labour: Labour costs Labour-hours of input Actual price per hour $5,880 2,100 $2.80 Required: a. Determine the "price" and "quantity" variances for each cost category. b. Determine the combined total flexible-budget variance for each cost category? c. Summarize the variances. Comment on possible cause for each, identifying potential connections between the variances. Henry Company produces bird houses and has determined the following direct cost categories and budgeted amounts: Standard InputsStandard Cost per input $7.50 9.00 3.00 Category Direct Materials for 1 unit output 1.00 Direct Labour 0.30 Direct Marketing 0.50 Actual performance for the company is shown below: Actual output: (in units) Direct Materials: Materials costs 4.000 30,225 3,900 Input purchased and used Actual price per input Direct Manufacturing Labour: Labour costs $7.75 S11,470 1,240 $9.25 Labour-hours of input Actual price per hour Direct Marketing Labour: Labour costs Labour-hours of input Actual price per hour $5,880 2,100 $2.80 Required: a. Determine the "price" and "quantity" variances for each cost category. b. Determine the combined total flexible-budget variance for each cost category? c. Summarize the variances. Comment on possible cause for each, identifying potential connections between the variances.

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