Reference no: EM132654787

Consider the following data collected for Great Homes, Inc.:

                                                                                                           Direct Materials                       Direct Manufacturing Labor

Cost incurred: Actual inputs                                                         $200,000                           $90,000

actual prices

Actual inputs: standard prices                                                        214,000                            86,000

Standard inputs allowed for actual output :standard prices                   225,000                             80,000

Required:

Compute the following:

(Compute the price, efficiency, and flexible-budget variances for direct materials and direct manufacturing labor as shown below)

Problem 1. Direct Material Price Variance, Efficiency Variance and total Direct Material Variance

Problem 2. Direct Labour Rate Variance, Efficiency Variance and total Direct Labour Variance

Problem 3. Why is the purpose of analyzing variances against the budget?

Problem 4. Explain what is a flexible budget