7-28 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 Direct labor 24 yards @$.55 3 hours @2.45 $13.20 7.35 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 30 1,000 dozen 24,100 yards 31 1,700 Dozen 40,440 yards 32 1,200 dozen 28,825 yards HOURS WORKED 2,980 5,130 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.