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10.6

Divertido 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 changeover for a given batch have been established: During the year, 79,500 pounds of material were purchased and used for the changeover activity. There were 30,000 batches produced, with the following actual prime costs: Required: Compute the materials and labor variances associated with the changeover activity, labeling cach variance as favorable or unfavorabie