Delta Company produces single-colored t-shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vat must be cleaned and prepared for the next batch of materials to be colored. The following standards for the changeover for a given batch have been established: Direct materials (2.4 lbs. @ $0.95) $2.28 Direct labor (0.75 hrs. @ $7.40) 5.55 Total prime cost $7.83 During the year, 79,500 pounds of material were purchased and used for the changeover activity. There were 30,000 batches produced, with the following actual prime costs: Direct materials $ 63,000 Direct labor $153,000 (for 22,450 hrs.)

Required:

1.) Prepare the journal entries for the (a) direct materials price variance, (b) direct materials usage variance, (c) direct labor rate variances.

2) Describe how flexible budgeting variances relate to the direct materials and direct labor variances computed in Requirements 1 and 2.