Camping Out Co. manufactures down sleeping bags. Each sleeping bag requires 4 kilograms of down and takes .3 hours of direct labour. The standard cost of the down used by Camping Out is $8 per kilogram and the standard labour cost is $10 per hour. In November, Camping Out purchased and used 15,000 kilograms of down for $120,750. During the year, the company manufactured 4,000 sleeping bags. Payroll reported a total of 1,480 direct labour hours at a cost of $14,060.

Instructions

• Calculate the materials price and quantity variances and indicate whether the variances are favourable or unfavourable. (10 marks)
• Calculate the labour price and quantity variances and indicate whether the variances are favourable or unfavourable. (10 marks)