Fashion Inc. manufactures leather jackets and leather bags for designers. There are 3 divisions - a jackets division, bag division and leather division. The jacket division sold 2,500 more units than budgeted and the bag division is very close to budget. However, I noticed that the jacket division shows some significant variances. (Appendix I and II).

Appendix I

Appendix II Jacket Division Budget versus Actual

	Budgeted			Actual
	Quantity per Cost Driver	Cost per Input Unit	Cost Per Jacket	Quantity per Cost Driver	Cost per Input Unit	Cost per Jacket
Direct Materials	2.00m	$75.00 per m	$150.00	2.22m	$78.00	$173.16
Direct Manufacturing Labor	0.80 Hours	$30.00 per hour	24.00	0.90 hours	$35.00 per hour	31.50
Variable Manufacturing Overhead	0.40 Hours	$40.00 per hour	16.00	0.38 hours	$39.00 per hour	14.82
Total Manufacturing Costs			$190.00			$219.48

	Budgeted	Actual
Unit Sales price per Jacket	$450.00	$460.00
Sales and production volume*	10,000	12,500

*Everything that is produced is sold

Required: CPA, please calculate the labor rate and efficiency variances as well as the materials price and usage variances.

APPENDIXI JACKET DIVISION VARIANCES Static Budget Variance $387.955 F Flexble Budget Variance $220,795 U Sales Volume Varance $008, 750 F Fixed cost Selling Price Variance 5350,795 U $5,000 F Vanable de Overheud) Druct Marketing vanance Labour 5769.500 U 503750 U