$($Click the icon to view the standards per chair.$)$

Read the requirements.

Now compute the price and efficiency variances for direct materials and direct manufacturing labor. Label each variance as favorable $($F$)$ or unfavorable $($U$).$

Data table

Now give a plausible explanation of why each variance occurred. Begin with the direct material variances.

The materials price variance: There was an unexpected

in materials price per square yard due to

competition

The materials efficiency variance: The production manager may have employed

workers or the budgeted materials standards were set too

The labor price variance:

in labor rates due to a

The labor efficiency variance:

efficient workers being employed or the use of

quality materials.

traced at the time of purchase to the purchasing department rather than to the production department. Compute the price and efficiency variances under this approach.

Begin with recalculating the costs using the information provided for the alternative approach.

Now compute the direct materials price and efficiency variances. Label each variance as favorable $(F)$ or unfavorable $($U$).$