Dawson, Inc., is a privately held furniture manufacturer. For August 2017. Dawson had the following...
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Dawson, Inc., is a privately held furniture manufacturer. For August 2017. Dawson had the following standards for one of its products, a wicker chair: Standards per Chair Direct materials 3 square yards of input at $5.50 per square yard Direct manufacturing labor 0.5 hour of input at $10.50 per hour The following data were compiled regarding actual performance: actual output units (chairs) produced, 2,200 square yards of input purchased and used, 6,200; price per square yard, $5.70; direct manufacturing labor costs, 9,844; actual hours of input, 920; labor price per hour, $10.70. 1. Direct Labor variances Show computations of price and quantity/efficiency variances for direct manufacturing labor. 2. Direct Material variances Suppose 8,700 square yards of materials were purchased (at $5.70 per square yard), even though only 6,200 square yards were used. Suppose further that variances are identified at their most timely control point, accordingly, direct materials price variances are isolated and traced at the time of purchase to the purchasing department rather than to the production department. Compute the price and quantity/efficiency variances under this approach
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