Direct Material Budget:

Direct Materials "Fabric"	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year
Required Production: "King" (In units)	3,520	3,454	3,418	3,103	13,495
Materials per unit (Sq. yds)	2.00	2.00	2.00	2.00	2.00
Production needs (Sq. yds)	7040	6908	6836	6206	26990
Required Production: "Prince" (In units)	950	2,456	3,079	2,005	8,490
Materials per unit (Sq. yds)	3.00	3.00	3.00	3.00	3.00
Production needs (Sq. yds)	2850	7368	9237	6015	25470
Total Production needs (For King and Prince)	9890	14276	16073	12221	52460
Add: desired Ending Inventory (Sq. yds)	3569	4018.25	3055.25	4461.25	4461.25
Total needs (Sq. yds)	13459	18294.25	19128.25	16682.25	56921.25
Less: Beg Inventory	2000	2000	2000	2000	2000
Materials to be purchased (Sq. yds)	11459	16294.25	17128.25	14682.25	54921.25
Cost of Mat per square yard	10	10	10	10	10
Cost of Materials to be purchased ($)	114590	162942.5	171282.5	146822.5	549212.5
Direct Materials "Wood"	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year
Required Production: "King" (In units)	3,520	3,454	3,418	3,103	13,495
Materials per unit (linear.ft)	10.00	10.00	10.00	10.00	10.00
Production needs (linear.ft)	35200	34540	34180	31030	134950
Required Production: "Prince" (In units)	950	2,456	3,079	2,005	8,490
Materials per unit (linear.ft)	20.00	20.00	20.00	20.00	20.00
Production needs (linear.ft)	19000	49120	61580	40100	169800
Total Production needs (For King and Prince)	54200	83660	95760	71130	304750
Add: desired Ending Inventory (linear.ft)	25098	28728	21339	225882	225882
Total needs (linear.ft)	79298	112388	117099	297012	530632
Less: Beg Inventory	2500	2500	2500	2500	2500
Materials to be purchased (linear.ft)	76798	109888	114599	294512	528132
Cost of Mat per linear.ft	20	20	20	20	20
Cost of Materials to be purchased ($)	1535960	2197760	2291980	5890240	10562640
Total Cost of Materials to be purchased ($)	1650550	2360702.5	2463262.5	6037062.5	11111852.5
Schedule of Expected Cash Disbursements for Materials
	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year
Accounts payable, December 31, 2021	1000000				1000000
Quarter 1 purchases	825275	825275			1650550
Quarter 2 purchases		1180351.25	1180351.25		2360702.5
Quarter 3 purchases			1231631.25	1231631.25	2463262.5
Quarter 4 purchases				3018531.25	3018531.25
Total Cash Disbursements	1825275	2005626.25	2411982.5	4250162.5	10493046.3
Balance accounts payable @Dec 31,2022	3018531.25

Direct Labor Budget:

Direct Labor Prince	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year
Units to be produced	950	2,456	3,079	2,005	8,490
Direct Labor Hours per unit	4.00	4.00	4.00	4.00	4.00
Total Direct Labor Hours Needed	3800	9824	12316	8020	33960
Direct Labor Cost per hour	30	30	30	30	30
Cash Disbursements for prince	114000	294720	369480	240600	1018800

Manufacturing Overhead Budget:

Overhead Costs Prince	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Year
Direct Labour Hours	3,800	9,824	12,316	8,020	33,960
Variable Manufacturing Overhead Rate	$10.00	$10.00	$10.00	$10.00	$10.00
Total Variable Overhead	$38,000.00	$98,240.00	$123,160.00	$80,200.00	$339,600.00
Total Fixed Overhead	$29,000.00	$29,000.00	$29,000.00	$29,000.00	$29,000.00
Total Manufacturing Overhead Cost	$67,000.00	$127,240.00	$152,160.00	$109,200.00	$368,600.00
No. of Direct Labor	3,800	9,824	12,316	8,020	33,960
Overhead allocation per direct labor hours					$10.85
No. of units produced					8,490
Overhead cost per unit					$43.42

1. Compute the following variances for Prince Model:

a. Materials price and quantity variances.

b. Labor rate and efficiency variances.

c. Variable overhead rate and efficiency variances

2. Pick out the two most significant variances that you computed in (3) above. Explain to managers possible causes of these variances.