Bristol Company produces blankets. The master budget shows the following standards information and indicates the company expected to produce and sell 28,000 units for the year.

Direct materials	4 yards per unit at $3 per yard
Direct labor	2 hours per unit at $10 per hour
Variable manufacturing overhead	2 direct labor hours per unit at $4 per hour

Bristol actually produced and sold 30,000 units for the year. During the year, the company purchased 130,000 yards of material for $429,000 and used 118,000 yards in production. A total of 65,000 labor hours were worked during the year at a cost of $637,000. Variable overhead costs totaled $231,000 for the year.

For this assignment, complete the following:

1. Calculate the materials price variance and materials quantity variance using the format shown in Figure 10.2. Clearly label each variance as favorable or unfavorable.
2. Calculate the labor rate variance and labor efficiency variance using the format shown in Figure 10.3. Clearly label each variance as favorable or unfavorable.
3. Calculate the variable overhead spending variance and variable overhead efficiency variance using the format shown in Figure 10.4. Clearly label each variance as favorable or unfavorable.
4. Company policy is to investigate all variances greater than 10 percent of the flexible budget amount for each of the three variable production costs: direct materials, direct labor, and variable overhead. Identify which of the six variances calculated in requirements a through c should be investigated.
5. Provide two possible explanations for each variance identified in requirement d.
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45. Variance Analysis for Direct Materials, Direct Labor, and Variable Overhead a. As shown below, the materials price variance is PROBLEMS (continued) 45. Variance Analysis for Direct Materials, Direct Labor, and Variable Overhead (continued) c. As shown below, the variable overhead spending variance is As shown below, the variable overhead efficiency variance is 45. Variance Analysis for Direct Materials, Direct Labor, and Variable Overhead (continued) b. As shown below, the labor rate variance is Ac showen helowe the lahor efficiency variance is 45. Variance Analysis for Direct Materials, Direct Labor, and Variable Overhead (continued) d. Based on the company's policy, the following variances would be investigated: Direct materials: Direct labor: Variable overhead: e. Possible explanations for the variances identified in requirement d follow. Possible causes of materials price variance: 45. Variance Analysis for Direct Materials, Direct Labor, and Variable Overhead a. As shown below, the materials price variance is PROBLEMS (continued) 45. Variance Analysis for Direct Materials, Direct Labor, and Variable Overhead (continued) c. As shown below, the variable overhead spending variance is As shown below, the variable overhead efficiency variance is 45. Variance Analysis for Direct Materials, Direct Labor, and Variable Overhead (continued) b. As shown below, the labor rate variance is Ac showen helowe the lahor efficiency variance is 45. Variance Analysis for Direct Materials, Direct Labor, and Variable Overhead (continued) d. Based on the company's policy, the following variances would be investigated: Direct materials: Direct labor: Variable overhead: e. Possible explanations for the variances identified in requirement d follow. Possible causes of materials price variance