Calculate materials and labor variances (Learning Objective 4)

Dock Guard, which uses a standard cost accounting system, manufactured 200,000 boat fenders during the year, using 1,450,000 feet of extruded vinyl purchased at $1.05 per foot. Production required 4,500 direct labor hours that cost $14 per hour. The materials standard was 7 feet of vinyl per fender at a standard cost of $1.10 per foot. The labor standard was 0.025 direct labor hour per fender at a standard cost of $13 per hour. Compute the price and efficiency variances for direct materials and direct labor. Does the pattern of variances suggest that Dock Guard’s managers have been making trade-offs? Explain.