Deporte Company produces single-colored t-shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vats must be cleaned and prepared for the next batch of materials to be colored. The following standards for changeover for a given batch have been established: Direct materials (2.4 lbs. @ $0.95) $2.28 Direct labor (0.75 hr. @ $7.40) 5.55 Standard prime cost $7.83 During the year, 79,500 pounds of material were purchased and used for the changeover activity. There were 30,000 batches produced, with the following actual prime costs: Direct materials $67,410 Direct labor $182,991 (for 22,450 hrs.) Required: Compute the materials and labor variances associated with the changeover activity, labeling each variance as favorable or unfavorable. Material Variances Price variance $fill in the blank 1 Usage variance $fill in the blank 3 Labor Variances Rate variance $fill in the blank 5 Efficiency variance $fill in the blank 7
Deporte Company produces single-colored t-shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vats must be cleaned and prepared for the next batch of materials to be colored. The following standards for changeover for a given batch have been established: Direct materials (2.4 lbs. @ $0.95) $2.28 Direct labor (0.75 hr. @ $7.40) 5.55 Standard prime cost $7.83 During the year, 79,500 pounds of material were purchased and used for the changeover activity. There were 30,000 batches produced, with the following actual prime costs: Direct materials $67,410 Direct labor $182,991 (for 22,450 hrs.) Required: Compute the materials and labor variances associated with the changeover activity, labeling each variance as favorable or unfavorable. Material Variances Price variance $fill in the blank 1 Usage variance $fill in the blank 3 Labor Variances Rate variance $fill in the blank 5 Efficiency variance $fill in the blank 7
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Deporte Company produces single-colored t-shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vats must be cleaned and prepared for the next batch of materials to be colored. The following standards for changeover for a given batch have been established:
| Direct materials (2.4 lbs. @ $0.95) | $2.28 |
| Direct labor (0.75 hr. @ $7.40) | 5.55 |
| $7.83 |
During the year, 79,500 pounds of material were purchased and used for the changeover activity. There were 30,000 batches produced, with the following actual prime costs:
| Direct materials | $67,410 |
| Direct labor | $182,991 (for 22,450 hrs.) |
Required:
Compute the materials and labor variances associated with the changeover activity, labeling each variance as favorable or unfavorable.
| Material Variances | ||
| Price variance | $fill in the blank 1 | |
| Usage variance | $fill in the blank 3 | |
| Labor Variances | ||
| Rate variance | $fill in the blank 5 | |
| Efficiency variance | $fill in the blank 7 |
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