All - Star Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2018, using 142,000 square feet of extruded vinyl purchased at $1.20 per square foot. Production required 440 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 $1.25 per square foot. The labor standard was 0.025 direct labor hour per fender, at a standard cost of $11.00 per hour.

Does the pattern of variances suggest All - Star Fender's managers have been making trade-offs? Explain.

The (unfavorable or favorable) direct materials cost variance comined with the (unfavorable or favorable) direct materials effiency variance suggests that managers may have used (higher-quality or lower-quality) direct materials. The net effect on the total direct materials variance is (unfavorable or favorable).

The (unfavorable or favorable) direct labor cost variance comined with the (unfavorable or favorable) direct labor effiency variance suggests that managers may have used [more-skilled (higher-paid) or lower-quality (lower-paid)] workers who performed more efficiently. The net effect on the total labor variance is (unfavorable or favorable).

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 Direct materials cost variance 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 Il Direct materials efficiency variance Direct labor efficiency variance =