Analysis of Variances (CPA, adapted) Ross Shirts, Inc., manufactures short- and long-sleeve men’s shirts for large stores. Ross produces a single-quality shirt in lots to each customer’s order and attaches the store’s label to each. The standard costs for a dozen long-sleeve shirts include:

Direct materials 24 yards @ $ .55 $13.20 Direct labor 3 hours @ 2.45 235 During October 19_9, Ross worked on three orders for long-sleeve shirts.

Job-cost records for the month disclose the following:

LOT UNITS IN LOT MATERIALS USED HOURS WORKED 30 1,000 dozen 24,100 yards 2,980 31 1,700 Dozen 40,440 yards 5,130 32 1,200 dozen 28,825 yards 2,890 The following information is also available:

(a) Ross purchased 95,000 yards of material during the month at a cost of $53,200. The material-price variance is recorded when goods are purchased, and all inventories are carried at standard cost.

(b) Direct labor incurred amounted to $27,500 during October. According to payroll records, production employees were paid $2.50 per hour.

(c) There was no work in process at October 1. During October, lots 30 and 31 were completed, and all material was issued for lot 32, which was 80 percent completed as to labor.

. Prepare a schedule computing the material-price variance for October 19_9 and indicate whether the variance is favorable or unfavorable.

. Prepare schedules computing, and indicating whether favorable or unfavorable, for each lot produced during October 19_9:

a. Material-efficiency variance in yards

b. Labor-efficiency variance in hours

c. Labor-price variance in dollars