Question
AllStar Fender, which uses a standard costsystem, manufactured 20,000 boat fenders during 2024, using 145,000 square feet of extruded vinyl purchased at $1.20 per square
AllStar Fender, which uses a standard costsystem, manufactured 20,000 boat fenders during 2024, using 145,000 square feet of extruded vinyl purchased at $1.20 per square foot. Production required 430 direct labor hours that cost $13.50 per hour. The direct materials standard was seven square feet of vinyl perfender, at a standard cost of $1.25 per square foot. The labor standard was 0.026 direct labor hour perfender, at a standard cost of $12.50 per hour.
Compute the cost and efficiency variances for direct materials and direct labor. Does the pattern of variances suggest AllStar Fender's managers have been makingtrade-offs? Explain.
Begin with the cost variances. Select the requiredformulas, compute the cost variances for direct materials and directlabor, and identify whether each variance is favorable(F) or unfavorable(U). (Abbreviations used: AC= actualcost; AQ= actualquantity; FOH= fixedoverhead; SC= standardcost; SQ= standardquantity.)
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