7. Assume the company produced 5,100 chairs during the period. Prepare a flexible budget for direct materials and direct labor, using the format shown in Table 10.2. Direct materials ($40 x 5100) $204,000 Direct labor($48 x 5100) 244,800 Total Budgeted variable prod. 448,800 NOW ASSUME that during the period the Company purchased AND used 45,000 yards of material for the 5,100 units, at a cost of $238,500. A total of 14,700 direct labor hours were actually worked during the period, at a cost of $238,140, to produce 5,100 chairs. 8. Calculate the materials price variance and materials usage variance using the format shown in Figure 10.2. Clearly label each variance as favorable or unfavorable. 9. Offer a possible explanation for the direct materials variances you computed. 10. Calculate the labor rate variance and labor efficiency variance using the format shown in Figure 10.3. Clearly label each variance as favorable or unfavorable.

7. Assume the company produced 5,100 chairs during the period. Prepare a flexible budget for direct materials and direct labor, using the format shown in Table 10.2. Direct materials ($405100)$204,000 Direct labor ($485100) Total Budgeted variable prod. 448,800244,800 NOW ASSUME that during the period the Company purchased AND used 45,000 yards of material for the 5,100 units, at a cost of $238,500. A total of 14,700 direct labor hours were actually worked during the period, at a cost of $238,140, to produce 5,100 chairs. 8. Calculate the materials price variance and materials usage variance using the format shown in Figure 10.2. Clearly label each variance as favorable or unfavorable. 9. Offer a possible explanation for the direct materials variances you computed. 10. Calculate the labor rate variance and labor efficiency variance using the format shown in Figure 10.3. Clearly label each variance as favorable or unfavorable