Direct materials (resin) 10.8 pounds per pot, at a cost of $3.15 per pound Direct labor 2.2 hours at a cost of $16.50 per hour Standard variable manufacturing overhead rate $2.40 per direct labor hour Pre-determined fixed manufacturing overhead rate $6.50 per direct labor hour Standard fixed MOH rate $9.00 per direct labor hour What is the total variance for direct labor?Earthern Ware allocated fixed manufacturing overhead to production based on standard direct labor hours. Last month, the company reported the following actual results for the production of 1.400 flower pots Direct materials Purchased 17,920 pounds at a cost of $5.30 per pound; Used 17,220 pounds to produce 1,400 pots Direct labor Worked 2.5 hours per flower pot (3,500 total DLH) at a cost of $16.00 per hour Actual variable manufacturing overhead $3.30 per direct labor hour for total actual variable manufacturing overhead of $11,550 Actual fixed manufacturing overhead S21,900 Standard fixed manufacturing overhead allocated based on actual production $25,200Earthern Ware is a manufacturer of large flower pots for urban settings. The company has these standards: Requirement1. Compute the direct labor rate variance and the direct labor efficiency variance.
2. What is the total variance for direct labor?
3. Who is generally responsible for each variance?
4. Interpret the variances.