Requirement 2. Compule the cost variance and the efficiency variance for direct malerials and for direct labor. For manulacturing overhead, compute the variable orerthead cost, variable overhead efficiency, foxed overhead cost, and fixed overhead volume variances. Fiound to the nearest dollar. Begin with the cost variances. Select the required formulas, compule the cost variances for direct materials and direct laboe, and identify whether each variance is favorable (F) or untarorable (U). (Found your answers Pequirement 3. Hawe Rouse's managers done a good job of a poor job controlling materials, labor, and overtead costs? Why? The variances computed in Pequirement 2 suggest that the managers hawe done a job controling materials and labor costs. The direct materials cost variance and direct labor eftiolency variance help offset the direct labor cost variance and direct muleriels efficiency varience. Managers have done a job controlling overtiead costs as evidenced by the tact that of the overhead variances are Requirement 4. Describe how Rouse's managers can benefit from the standard costing system. Standard costing helps managers do the following: \begin{tabular}{|c|c|c|c|c|} \hline \multirow{2}{*}{Sales} & \multirow[b]{2}{*}{ ( 1,000 recliners x$510 each) } & \multicolumn{2}{|c|}{\begin{tabular}{c} Static Budget \\ (1,000 recliners ) \end{tabular}} & \begin{tabular}{l} Actual Results \\ (980 recliners) \end{tabular} \\ \hline & & $ & 510,000 & \\ \hline & (980 recliners $495 each) & & & 485,100 \\ \hline \multicolumn{5}{|c|}{ Variable Manufacturing Costs: } \\ \hline \multirow[t]{2}{*}{ Direct Materials } & (6,000 yds. @ \$8.50/yd.) & & 51,000 & \\ \hline & (6,143 yds. @ \$8.30 / yd.) & & & 50,987 \\ \hline \multirow[t]{2}{*}{ Direct Labor } & (10,000 DLHr @ \$12.00 / DLHr) & & 120,000 & \\ \hline & (9,600 DLHr @ \$12.20 / DLHr) & & & 117,120 \\ \hline \multirow[t]{2}{*}{ Variable Overhead } & (6,000 yds. @ \$5.00/yd.) & & 30,000 & \\ \hline & (6,143 yds. @ $6.40/ yd.) & & & 39,315 \\ \hline \multicolumn{5}{|c|}{ Fixed Manufacturing Costs: } \\ \hline \multicolumn{2}{|l|}{ Fixed Overhead } & & 60,000 & 62,000 \\ \hline \multicolumn{2}{|l|}{ Total Cost of Goods Sold } & & 261,000 & 269,422 \\ \hline \multicolumn{2}{|l|}{ Gross Profit } & $ & 249,000 & 215,678 \\ \hline \end{tabular}