Deporte Company produces single-colored T-shirts. Materials for the shirts are dyed inlarge vats. After dying the materials for a given color, the vats must be cleaned and preparedfor the next batch of materials to be colored. The following standards for changeover for agiven batch have been established:Direct materials (2.4 lbs. @ $0.95) $2.28Direct labor (0.75 hr. @ $7.40) 5.55Standard prime cost $7.83During the year, 79,500 pounds of material were purchased and used for the changeoveractivity. There were 30,000 batches produced, with the following actual prime costs:Direct materials $ 63,000Direct labor $163,385 (for 22,450 hrs.) Refer to the information for Deporte Company above.Required:Compute the materials and labor variances associated with the changeover activity, labelingeach variance as favorable or unfavorable.
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 $ 63,000
Direct labor $163,385 (for 22,450 hrs.)
Refer to the information for Deporte Company above.
Required:
Compute the materials and labor variances associated with the changeover activity, labeling
each variance as favorable or unfavorable.
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