P24-5A SportsTime manufactures T-shirts that it sells to other companies for customizing with their own logos. SportsTime prepares flexible budgets and uses a standard cost system to control manufacturing costs. The standard unit cost of a basic white T-shirt is based on static budget volume of 40.000 T-shirts per month. The unit cost is computed as follows: Direct materials (2 sq. yd @ $0.25 per sq. yd).. Direct labor (3 minutes @ $0.12 per minute). Manufacturing overhead: Variable (3 minutes @ $0.06 per minute) $0.50 0.36 $0.18 0.42 0.60 $1.46 Fixed (3 minutes @ $0.14 per minute) Total cost per T-shirt. Transactions during May of the current year included the following:

a. Actual production and sales were 42.700 T-shirts.

b. Actual direct materials usage was 1.80 square yards per T-shirt at an actual cost of $0.20 per square yard.

c. Actual direct labor usage of 130,000 minutes cost $18,850.

d. Actual overhead cost was $28.200. Required 1. Compute the price and efficiency variances for direct materials and direct labor. 2. Journalize the usage of direct materials and the assignment of direct labor, including the related variances. 3. For manufacturing overhead, compute the total variance, the flexible budget variance, and the production volume variance. 4. SportsTime intentionally hired more skilled workers during May. How did this decision affect the cost variances? Overall, was the decision wise?