Chapter 23, Problem E23.19E

Calculating materials and labor variances Learning Objective 3

DLEff. Var. $2,400 F

Matthews Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2018, using 143,000 square feet of extruded vinyl purchased at $1.30 per square foot. Production required 400 direct labor hours that cost $16.00 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $I.35 per square foot. The labor standard was 0.028 direct labor hour per fender, at a standard cost of $I 5.00 per hour.
Compute the cost and efficiency variances for direct materials and direct labor. Does the pattern of variances suggest Matthews Fender's managers have been making trade-offs? Explain.