Kincaid Ltd. produces and sells leather wallets. In the current year, the company budgeted for the production and sale of 18,000 wallets; however, 21,000 wallets were actually produced and sold. Each wallet has a standard requiring eight square inches of material at a cost of .20 per inch and ten minutes of assembly time at a cost of $.15 per minute. Actual costs for the production of 21,000 wallets were $36,080 for materials (164,000 inches purchased and used @ $.22 per inch) and $36,000 for labor (225,000 minutes @ $.16 per minute)
Required: Compute each of the following variances. Indicate whether the variance is favorable (F) or unfavorable (U).
A. Direct materials price variance
B. Direct materials usage variance
C. Direct labor rate variance
D. Direct labor efficiency variance