Comfort Inc. manufactures luxury leather armchairs. The standard cost for material and labor is $89.20 per chair. This includes 8 kilograms of direct material at a standard cost of $5.00 per kilogram, and 6 hours of direct labor at $8.20 per hour. The following data relate to May.
• Units completed: 5,600 chairs.
• Purchases of materials: 50,000 kilograms for $249,250
• Actual quantity of direct materials used: 51,500kg
• Total actual labor costs: $300,760
• Actual hours of labor: 36,500 hours
• Work-in-process inventory on May 1: none.
• Work-in-process inventory on May 31: 800 chairs (75 percent complete as to labor; material is issued at the beginning of processing).
Required:
Compute the following amounts. Indicate whether each variance is favorable or unfavorable.
a. Direct materials price variance for May
b. Direct materials quantity variance for May
c. Direct-labor rate variance for May
d. Direct labor efficiency variance for May