Banner Company manufactures flags of various countries. Each flag has a standard of eight square feet of fabric and three hours of direct labor time. Information about recent production activity follows.
- Actual cost of fabric: $4.50 per square foot
- Fabric consumed: 32,080 square feet
- Standard price per square foot of fabric: $4.25
- Standard direct labor rate: $10.00 per hour
- Actual direct labor rate: $10.20 per hour
- Actual labor hours worked: 11,940
- Actual production completed: 4,000 flags
a. Compute the materials price variance and the materials quantity variance.
b. Compute te labor rate variance and the labor efficiency variance.