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3. Camisa Company produces single-colored T-shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vats
3. Camisa Company produces single-colored T-shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vats must be cleaned and prepared for the next batch of materials to be colored. The following standards for the changeover of a given batch have been established Direct materials (2.5 lbs.@$0.90) Direct labor (0.75 hr.@ $7.00) Standard Prime Cost $2.25 5.25 $7.50 During the year, 53,000 pounds of material were purchased and used for the changeover activity. There were 20,000 batches produced, with the following actual prime costs: Direct materials Direct labor $42,000 102,000 (for 14,900 hrs) Required Compute the materials and labor variances associated with the changeover activity, labeling each variance as favorable and unfavorable
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