Operations And Supply Chain Management Assignment Help – David James

Operations And Supply Chain Management Assignment Help – David James

Question – David James is a cost accountant and business analyst for Doorknob Design Company (DDC), which
manufactures expensive brass doorknobs. DDC uses two direct cost categories: direct materials and
direct manufacturing labor. James 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 2012, DDC budgeted annual production of 400,000 doorknobs
and adopted the following standards for each doorknob:

Actual results for April 2012 were as follows:
Production 35,000 doorknobs
Direct materials purchased 12,000 lb. at $11/lb.
Direct materials used 10,450 lb.
Direct manufacturing labor 38,500 hours for $ …Read More808,500
Variable manufacturing overhead $64,150
Fixed manufacturing overhead $152,000
Required
1. For the month of April, compute the following variances, indicating whether each is favorable (F) or
unfavorable (U):
a. Direct materials price variance (based on purchases)
b. Direct materials efficiency variance
c. Direct manufacturing labor price variance
d. Direct manufacturing labor efficiency variance
e. Variable manufacturing overhead spending variance
f. Variable manufacturing overhead efficiency variance
g. Production-volume variance
h. Fixed manufacturing overhead spending variance
2. Can James use any of the variances to help explain any of the other variances? Giveexamples. …Read Less


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