Problem: Adelphi Fabrics Corporation manufactured 500 units of a special multilayer fabric with the trade name Stylex during July. The following information from the Stylex production department pertains to July:
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Direct material purchased: 18,000 yards at $1.38 per yard
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$24,840
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Direct material used: 9,500 yards at $1.38 per yard
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13,110
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Direct labor used: 2,100 hours at $9.15 per hour
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19,215
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The standard prime costs for one unit of Stylex are:
Required:
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Direct material: 20 yards at $1.35 per yard
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$27
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Direct labor: 4 hours at $9.00 per hour
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36
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Total standard prime cost per unit of output
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$63
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Compute the following variances for the month of July, indicating whether each variance is favorable or unfavorable.
a. Direct-material price variance.
b. Direct-material quantity variance.
c. Direct-labor rate variance.
d. Direct-labor efficiency variance.