Ashfield manufactures embroidered jackets. The company prepares flexible budgets and uses a standard cost system to control manufacturing costs. The following standard unit cost of a jacket is based on the

static budget volume of $14,100$ jackets per month:

View the cost data.

Read the requirements

Requirement $1.$ Compute the price and efficiency variances for direct materials and direct labour.

Begin by determining the formula for the price variance, then compute the price variances for direct materials $($DM$)$ and direct labour $($DL$).($Enter the results as positive numbers. Label each variance as

favourable $($F$)$ or unfavourable $($U$).)$

Requirements

Cost data

Compute the price and efficiency variances for direct materials and direct

labour.

For manufacturing overhead, compute the total variance, the flexible

budget variance, and the production volume variance.

Ashfield's management intentionally purchased superior materials for

November production. How did this decision affect the other cost variances?

Overall, was the decision wise? Explain.

Data for November of the current year include the following:

a$.$ Actual production was $13,700$ jackets.

b$.$ Actual direct materials usage was $2\mathrm{.}60m^2$ per jacket at an actual cost of $$4\mathrm{.}20$

per $m^2.$

c$.$ Actual direct labour usage of $25,200$ hours cost $$239,400.$

d$.$ Total actual overhead cost was $$77,000.$