Maxine Watters,the Managerial Accountant Has Been Asked by the Coolare

Essay

Maxine Watters,the managerial accountant has been asked by the Coolare Ceiling Fan Company president to prepare an analysis of the effectiveness of the new management team.They manufacture paper fans.2016 standards:
Budget
Direct materials - 4 parts @ $2 per part
Direct labor - one half hour (0.5)@ $10 per hour
Variable overhead - 2 machine hours @ $3 per hour
Fixed overhead - $900,000
Estimated production - 100,000
Actual results 2016:
Direct materials - 585,000 parts at a total cost of $1,462,500 were purchased and used
Direct labor - 51,000 hours at a cost of $561,000
Variable overhead - 240,000 machine hours at a cost of $840,000
Fixed overhead - $870,000
Actual production - 130,000 fans
Required:
Requirement 1: Compute the direct material and direct labor budget variances.Requirement 2: Compute the variable and fixed overhead variances.