HearSmart manufactures headphone cases. During September 2014, the company produced and sold 107,000 cases and recorded the following cost data:

Requirements
1. Compute the cost and efficiency variances for direct materials and direct labor.
2. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances.
3. HearSmart€™s management used better quality materials during September. Discuss the trade- off between the two direct materialvariances.

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Standard Cost Information Quantity Price 2 parts $0.16 per part 0.02 hours 8.00 per hour Direct Materials Direct Labor Variable Manufacturing Overhead 0.02 hours 9.00 per hour Fixed Manufacturing Overhead ($32,980 for static budget volume of 97,000 units and 1,940 hours, or $17 per hour) Actual Cost Information Direct Materials Direct Labor Variable Manufacturing Overhead Fixed Manufacturing Overhead (210,000 parts0.21 per part) 44,100 (1,640 hours $8.15 per hour) 13,366 8,000 30,000