Gerald/Brooke, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as follows.

Bobby Brickley, operations manager, was reviewing the results for November when he became upset by the unfavorable variances he was seeing. In an attempt to understand what had happened, Bobby asked CFO Lila Davis for more information. She provided the following overhead budgets, along with the actual results for November.
The company purchased and used 115,000 yards of fabric during the month. Fabric purchases during the month were made at $1.45 per yard. The direct labor payroll ran
$248,050, with an actual hourly rate of $12.10 per direct labor hour. The annual budgets were based on the production of 1,000,000 shirts, using 250,000 direct labor hours. Though the budget for November was based on 80,000 shirts, the company actually produced 82,000 shirts during the month.

Required
a. Calculate the direct materials price and quantity variances for November.
b. Calculate the direct labor rate and efficiency variances for November.
c. Calculate the variable overhead spending and efficiency variances for November.
d. Calculate the fixed overhead spending variance for November.
e. Provide an explanation for each variance you calculated.
f. Which of these variances should Bobby be held responsible for?Why?

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Standard Price $1.60 per yard S 12 per DLH 4 per DLH 6 per DLH Standard Quantity Standard Cost $2.00 3.00 1.00 1.50 $7.50 Direct materials Direct labor Variable overhead 1.25 yards 0.25 DLH 0.25 DLH 0.25 DLH Fixed overhead $ Variable Overhead Budget Annual Budget Per Shirt $0.45 0.30 0.20 0.05 $1.00 November- Actual Indirect material Indirect labor Equipment repair Equipment power $ 450,000 300,000 200,000 50,000 $1,000,000 $36,000 33,700 16,400 12,300 $98,400 Total Fixed Overhead Budget Annual Budget November-Actual Supervisory salaries Insurancee Property taxes Depreciation Utilities Quality inspection $ 260,000 350,000 80,000 320,000 210,000 280,000 1,500,000 22,000 29,500 6,500 34,000 21,600 29,900 $143,500 Total