Author Question: Mirada Manufacturing produces stained glass lamp shades. The standard cost card for a lamp shade is ... (Read 93 times)

hannahmadyronde · **on:** Feb 5, 2023

Mirada Manufacturing produces stained glass lamp shades. The standard cost card for a lamp shade is as follows:

Standard Price

Standard Quantity

Standard Cost

Direct materials

$4.80/pound

1.25 pounds

$ 6.00

Direct labor

$36.00 per DLH

0.25 DLH

9.00

Variable overhead

$12.00 per DLH

0.25 DLH

3.00

Fixed overhead

$18.00 per DLH

0.25 DLH

4.50

Total standard cost per shade

$22.50

Ron Shop, operations manager, became upset when he reviewed the unfavorable variances for April. He asked Heidi Cotton, controller, for more information. She provided the following overhead budgets, along with the actual results for April.

•	The company purchased and used 115,000 pounds of glass during the month.

•	Glass purchases during the month were made at $4.35 per pound.

•	The direct labor payroll ran $744,150, with an actual hourly rate of $36.30 per direct

labor hour.

•	The annual budgets were based on the production of 1,000,000 shades, using 250,000

direct labor hours.

•	The company actually produced 82,000 shades during the month.

Variable Overhead Budget

	Annual Budget	Per Shade	April — Actual
Indirect material	$1,350,000	$1.35	$108,000
Indirect labor	900,000	0.90	101,100
Equipment repair	600,000	0.60	49,200
Equipment power	150,000	0.15	36,900
Total	$3,000,000	$3.00	$295,200

Fixed Overhead Budget

Annual Budget

April — Actual

Supervisory salaries	$ 780,000	$ 66,000
Insurance and property tax	1,290,000	108,000
Depreciation	1,800,000	191,700
Utilities	630,000	64,800
Total	$4,500,000	$430,500

Required:

a.	Calculate the direct materials price and quantity variances for April.

b.	Calculate the direct labor rate and efficiency variances for April.

c.	Calculate the variable overhead spending and efficiency variances for April.

d.	Calculate the fixed overhead spending variance for April.

e.	Provide an explanation for each variance you calculated.

f.	Which of these variances should Ron be held responsible for? Why?

senorfranco · **Reply #1 on:** Feb 5, 2023

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 64% of students answer this correctly