Bargain Fender, which uses a standard cost system, manufactured $20,000$ boat fenders during $2024,$ using $144,000$ square feet of extruded vinyl purchased at

$$1\mathrm{.}05$ per square foot. Production required $450$ direct labor hours that cost $$16\mathrm{.}50$ per hour. The direct materials standard was seven square feet of vinyl per fender,

at a standard cost of $$1\mathrm{.}10$ per square foot. The labor standard was $0\mathrm{.}025$ direct labor hour per fender, at a standard cost of $$15\mathrm{.}50$ per hour.

Read the requirement.

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$]$

$=$

${?}_{{?}_{?}}|=$

Requirement

Compute the cost and efficiency variances for direct materials and direct labor.

Does the pattern of variances suggest Bargain Fender's managers have been

making trade$-$offs? Explain.