Transcribed Image Text: %V9 l1. UUA o homework- m… -> Actuar direct manutacturing labor cost 12,650 euro Standards Purchase price of direct materials Materials per box 0.03 euro/g 200 g

Transcribed Image Text: %V9 l1.
UUA
o homework- m…
->
Actuar direct manutacturing labor cost
12,650 euro
Standards
Purchase price of direct materials
Materials per box
0.03 euro/g
200 g
12 euro/hour
Wage rate
Boxes per hour
10
Required : Compute the price and efficiency variances of direct materials and direct manufacturing
labor.
Question 2: Eric Williams is a cost accountant and business analyst for Diamond Design Company
(DDC), which manufactures expensive brass doorknobs. DDC uses two direct-cost categories: direct
materials and direct manufacturing labor. Williams feels that manufacturing overhead is most closely
related to material usage. Therefore, DDC allocates manufacturing overhead to production based upon
pounds of materials used. At the beginning of 2017, DDC budgeted annual production of 420,000
doorknobs and adopted the following standards for each doorknob:
Input
Cost/Doorknob
Dircct materials (brass)
0.3 lb. @ $10/lb.
$ 3.00
Direct manufacturing labor
Manufacturing overhead:
1.2 hours @ $17/hour
20.40
Variable
$5/lb. X 0.3 lb.
1.50
Fixed
$15/lb. X 0.3 lb.
4.50
Standard cost per doorknob
$29.40
Actual results for April 2017 were as follows:
Production
Direct materials purchased
Direct materials used
29,000 doorknobs
12,400 Ib. at $11/lb.
8,500 lbs.
Direct manufacturing labor
Variable manufacturing overhead
Fixed manufacturing overhead
29,200 hours for $671,600
$ 65,100
$158,000
Required :
1. Compute the price and efficiency variances of direct materials and direct manufacturing labor.
2. Compute the spending and efficiency variances of variable overhead and spending and volume of
fixed overhead.

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