Cooke Manufacturing Company produces high-quality men's pajamas for several large retail stores.

The standard costs for each dozen pairs of pajamas is as follows:

Direct materials, 30 yards at $0.80 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24

Direct labor, 4 hours at $5.00 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Manufacturing overhead:

Variable cost: 4 direct labor hours at $2.00. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Fixed cost: 30% of direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Total product cost per dozen pairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $58

During the month of September, the company filled three orders of pajamas at the following costs:

The following additional information involving materials and labor was supplied by the accounting department:
a. Purchases of materials during the month amounted to 60,000 yards at $0.82 per yard.
b. Total direct labor cost for the month was $37,689.
Required:
1. Compute the materials price variance for September. (Materials are carried in Direct Materials Inventory at standard.)
2. Compute the materials quantity variance for September.
3. Compute the labor rate and labor efficiency variances forSeptember.

Transcribed Image Text:

Number of Dozens 400 900 500 1,800 Labor Hours Yards Used Order 8. 1,500 12,200 3,750 2,140 7,390 26,750 10 15,450 54,400