Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Eastern Seams is a local casual clothing shop that makes a variety of t-shirt styles. Below is some actual vs. budget information for Eastern's t-shirts
Eastern Seams is a local casual clothing shop that makes a variety of t-shirt styles. Below is some actual vs. budget information for Eastern's t-shirts for the month of May. Assume no beginning/ending inventories for simplicity. The cost-allocation base for both variable and fixed overhead is direct labor-hours.
Data for the Month of May | ||
Static | ||
Actual | Budget | |
# T-shirts made and sold | 5,200 | 5,350 |
Selling price per t-shirt | $18 | $17 |
Yards of fabric per t-shirt | 1.1 | 1 |
Cost per yard of fabric | $2.81 | $2.66 |
Time in hours to sew one t-shirt | 0.25 | 0.2 |
Cost of direct labor (per hour) | $14 | $15 |
Variable overhead costs | $3,600 | $3,000 |
(utilities, sewing machine maintenance, etc.) | ||
Fixed overhead costs | $4,700 | $4,800 |
(store rent, insurance, etc.) |
What is the flexible budget variance for direct materials?
a. | $2,241.20 F | |
b. | $2,241.20 U | |
c. | $1,842.20 F | |
d. | $1,842.20 U |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started