Bonita, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as follows. Direct materials Direct labor Variable overhead Fixed overhead Standard Price Standard Quantity Standard Cost $6.00 6.00 2.00 3.00 $17.00 $4 per yard $12 per DLH $4 per DLH $6 per DLH 1.50 yards 0.50 DLH 0.50 DLH 0.50 DLH Sandy Robison, operations manager, was reviewing the results for November when he became upset by the unfavorable variances he was seeing. In an attempt to understand what had happened, Sandy asked CFO Suzy Summers for more information. She provided the following overhead budgets, along with the actual results for November. The company purchased and used 80,300 yards of fabric during the month. Fabric purchases during the month were made at $3.90 per yard. The direct labor payroll ran $317,275, with an actual hourly rate of $12.25 per direct labor hour. The annual budgets were based on the production of 50,000 shirts, using 252,000 direct labor hours. Though the budget for November was based on 49,600 shirts, the company actually produced 51,600 shirts during the month Variable Overhead Budget Indirect material Indirect labor Equipment repair Equipment power Annual Budget Per Shirt November-Actual $0.90 0.60 0.40 0.10 $2.00 $447,000 298,000 196,000 54,000 $995,000 $48,600 31,700 20,400 6,900 $107,600 Total