Stratton, 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.

Sandy Robison, 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, Sandy asked CFO Suzy Summers for more information. She provided the following overhead budgets, along with the actual results for November.
The company purchased and used 80,200 yards of fabric during the month. Fabric purchases during the month were made at $3.90 per yard. The direct labor payroll ran $319,725, with an actual hourly rate of $12.25 per direct labor hour. The annual budgets were based on the production of 50,000 shirts, using 250,000 direct labor hours. Though the budget for November was based on 50,000 shirts, the company actually produced 52,000 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 Sandy be held responsible for? Why?

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Standard Price $ 4 per yard $12 per DLH $ 4 per DLH 6 per DLH Standard QuantityStandard Cost Direct materials Direct labor Variable overhead Fixed overhead 1.5 yards 0.5 DLH 0.5 DLH 0.5 DLH $6.00 6.00 2.00 3.00 $17.00 Variable Overhead Budget Annual Budget 450,000 300,000 200,000 50,000 $1,000,000 Per Shirt November-Actual Indirect material Indirect labor Equipment repair Equipment power $0.90 0.60 0.40 0.10 $2.00 $49,200 31,400 20,500 6,900 $108,000 Total Fixed Overhead Budget Annual Budget November-Actual 260,000 350,000 80,000 320,000 210,000 280,000 $ 22,000 27,500 6,500 26,000 20,300 25,000 $127,300 Supervisory salaries nsurance Property taxes Depreciation Utilities Quality inspection Total $1,500,000