university of southern california Operations And Supply Chain Management Assignment Help - Direct Manufacturing

Question - Direct Manufacturing Labor and Variable Manufacturing Overhead Variances. Sarah Beth’s Art
Supply Company produces various types of paints. Actual direct manufacturing labor hours in the
factory that produces paint have been higher than budgeted hours for the last few months and the
owner, Sarah B. Jones, is concerned about the effect this has had on the company’s cost overruns.
Because variable manufacturing overhead is allocated to units produced using direct manufacturing
labor hours, Sarah feels that the mismanagement of labor will have a twofold effect on company
profitability. Following are the relevant budgeted and actual results for the second quarter of 2008.

1. Calculate the direct manufacturing labor price ...Read More and efficiency variances and indicate whether each
is favorable (F or unfavorable (U).
2. Calculate the variable manufacturing overhead spending and efficiency variances and indicate
whether each is favorable (F) or unfavorable (U).
3. For both direct manufacturing labor and variable manufacturing overhead, do the price/spending
variances help Sarah explain the efficiency variances?
4. Is Sarah correct in her assertion that the mismanagement of labor has a twofold effect on cost
over- runs? W hy might the variable manufacturing overhead efficiency variance not be an accurate
representation of the effect of labor overruns on variable manufacturing overheadcosts? ...Read Less

Solution Preview - No Solution Preview Available

Original Question Documents

N/A