Camping Out Co. manufactures down sleeping bags. Each sleeping bag requires 4 kilograms of down and takes .3 hours of direct labour. The standard cost of the down used by Camping Out is $8 per kilogram and the standard labour cost is $10 per hour. In November, Camping Out purchased and used 15,000 kilograms of down for $120,750. During the year, the company manufactured 4,000 sleeping bags. Payroll reported a total of 1,480 direct labour hours at a cost of $14,060.
Instructions
Calculate the materials price and quantity variances and indicate whether the variances are favourable or unfavourable.
Calculate the labour price and quantity variances and indicate whether the variances are favourable or unfavourable.