Namathe Industries manufactures children's footballs with the following standard costs per unit:

Material: one square foot of leather at $2.00 ....... $2.00

Direct labor: 1.6 hours at $9.00 ........... 14.40

Variable overhead cost .............. 3.00

Fixed overhead cost ............... 3.00

Total cost per unit ................$22.40

Per-unit overhead cost was calculated from the following annual overhead budget for 180,000 footballs.

Following are the charges to the manufacturing department for November when
15,000 units were produced:
Material (15,900 square feet at $2.00) ........$31,800
Direct labor (24,600 hours at $9.10) ........223,860
Indirect labor (7,200 hours at $7.10) ........ 51,120
Supplies (oil) (18,000 gallons at $0.55) ........ 9,900
Allocated service department variable OH costs .... 9,600
Supervision ................... 7,425
Depreciation .................... 11,250
Other fixed costs ................ 3,750
Total ...................... $348,705
Purchasing normally buys about the same quantity as is used in production during a month. In November, the company purchased 15,600 square feet of material at a price of $2.10 per foot.
a. Calculate the following variances from standard costs for the data given:
1. Material purchase price
2. Material quantity
3. Direct labor rate
4. Direct labor efficiency
5. Overhead budget
b. The company has divided its responsibilities so that the Purchasing Department is responsible for the purchase price of materials and the Manufacturing Department is responsible for the quantity of materials used. Does this division of responsibilities solve the conflict between price and quantity variances? Explain your answer.
c. Prepare a report detailing the overhead budget variance. The report, which will be given to the Manufacturing Department manager, should only show that part of the variance which is her responsibility and should highlight the information in ways that would be useful to her in evaluating departmental performance and when considering corrective action.
d. Assume that the departmental manager performs the timekeeping function for this manufacturing department. From time to time, analyses of overhead and direct labor variances have shown that the manager has deliberately misclassified labor hours (i.e., listed direct labor hours as indirect labor hours and vice versa) so that only one of the two labor variances is unfavorable. It is not feasible economically to hire a separate timekeeper. What should the company do, if anything, to resolve thisproblem?

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Varlable Overhead Cost Indirect labor-90,000 hours at $7.00 Supplies (oil) 180,000 gallons at $0.50 Allocated variable service department costs $630,000 90,000 90,000 Total variable overhead cost 810,000 Fixed Overhead Cost Supervision Depreciation Other fixed costs $ 81,000 135,000 45,000 Total fixed overhead cost 261,000 $1,071,000 Total budgeted overhead cost at 180,000 units