Deluxe Guard, which used a standard cost accounting system, manufactured $150,000$ boat fenders during the year, using $1,100,000$ feet of extruded vinyl purchased at $$1\mathrm{.}05$ per foot. Production

required $4,300$ direct labor hours that cost $$16\mathrm{.}00$ per hour. The materials standard was $7$ feet of vinyl per fender at a standard cost of $$1\mathrm{.}20$ per foot. The labor standard was $0\mathrm{.}025$ direct labor hour

per fender at a standard cost of $$16\mathrm{.}50$ per hour.

Read the requirements.

Requirement $1.$ Compute the price and quantity variances for direct materials. Compute the rate and efficiency variances for direct labor. $($Enter the variances as positive numbers. Enter currency

amounts to the nearest cent and your answers to the nearest whole dollar. Label the variance as favorable $($F$)$ or unfavorable $($U$)$ in the input field after the amount you enter. Abbreviations used:

DM $=$ Direct materials, DL $=$ Direct labor.$)$

Begin with the variances for direct materials. First, determine the formula for the direct materials price variance, then compute the price variance for direct materials. $($Assume that the quantity of

materials purchased is equal to the quantity of materials used.$)$

Requirements

Compute the price and quantity variances for direct materials. Compute the

rate and efficiency variances for direct labor.

Does the pattern of variances suggest that the company's managers have

been making trade$-$offs? Explain.