5. Deluxe Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2024, using 142,000 square feet of extruded vinyl purchased at $1.05 per square foot. Production required 460 direct labor hours that cost $12.00 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.10 per square foot. The labor standard was 0.026 direct labor hour per fender, at a standard cost of $11.00 per hour. Read the requirement Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity: FOH = fixed overhead; SC = standard cost; SQ = standard quantity.) Formula Variance (2) Direct materials cost variance (1) (4) (3) Direct labor cost variance Select the required formulas, compute the efficiency variances for direct materials and direct labor, and identify whether each variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity: FOH = fixed overhead: SC = standard cost: SQ = standard quantity.) Formula Variance (6) (5) Direct materials efficiency variance (8) (7) Direct labor efficiency variance Does the pattern of variances suggest Deluxe Fender's managers have been making trade-offs? Explain direct materials efficiency The (9) direct materials cost variance combined with the (10) direct materials. The net effect on the total direct variance suggests that managers may have used (11) materials variance is (12) direct labor efficiency variance The (13) direct labor cost variance combined with the (14) workers who performed more efficiently. The net effect on the suggests that managers may have used (15) total direct labor variance is (16) 1: Requirement Compute the cost and efficiency variances for direct materials and direct labor. Does the pattern of variances suggest Deluxe Fender's managers have been making trade-offs? Explain. (1) O O (AQ - SQ) SC O (AC-SC) AQ O Actual FOH - Allocated FOH O (AC-SC) SQ O Actual FOH - Budgeted FOH O (AQ - SQ) AC O Bugeted FOH - Allocated FOH (2) O OF OU 3/21/2021, 10:27 and Standard Cost Systems-Maglelette Hudson (3) O (AQ - SQ) SC O (AC-SC) X AQ O Actual FOH - Allocated FOH O (AC-SC) * SQ O Actual FOH - Budgeted FOH O (AQ - SQ) AC O Bugeted FOH - Allocated FOH (4) O OF OU (5) O O (AQ - SQ) SC O (AC-SC) AQ O Actual FOH - Allocated FOH O (AC-SC) X SQ O Actual FOH - Budgeted FOH O (AQ - SQ) * AC O Bugeted FOH - Allocated FOH (6) O OF OU (7) (9) O favorable o unfavorable O (AC-SC) AQ O (AC-SC) X SQ O (AQ - SQ) * AC O (AQ - SQ) x SC O Actual FOH - Allocated FOH O Actual FOH - Budgeted FOH O Bugeted FOH - Allocated FOH (8) O OF OU (10) O favorable o unfavorable (11) O higher-quality O lower-quality (12) O favorable O unfavorable (13) O favorable O unfavorable (14) O favorable O unfavorable (15) O more skilled (higher-paid) O lesser skilled (lower-paid) (16) O favorable O unfavorable 3/21/2021, 10:27 AM 2 of 2