A sporting goods store manufactures camping tents using lightweight fabric. Each tent uses the following standard material & labor costs.
Standard Costs per tent
Direct Labor: 2 hours @ $10 $20
Direct Material: 4 yards @ $5.25 $21
The following data was recorded for Feb, the first month of operations:
Fabric purchased: 9,000 yards $5 per yard
Fabric used in production: 7,000 yards
Direct labor used: 3,600 hours $10.75 per hour
Actual # of tents produced: 1,7000 tents
Required:
1-Calculate the direct materials price &quantity variance and designate if it is U or F. Note the materials price variance is based on actual material purchased & the quantity variance is based on material used.
2-Calculate the direct labor rate & efficiency variances & designate U or F.