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Frazier Company produces high-quality leather belts. The companys facility in Boise uses a standard costing system and has set the following standards for material and
Frazier Company produces high-quality leather belts. The companys facility in Boise uses a standard costing system and has set the following standards for material and labor:
Leather (5 strips @ $3 per strip)
Direct labor (0.75 hr. @ 12 per hour)
During the first month of the year, the factory produced 87,000 belts. Actual leather purchased and used was 395,000 strips at $3.60 per strip. Actual direct labor was 75,400 hours at $12.50 per hour.
Required:
- Calculate the materials price and efficiency variances using the fork diagram.
- Calculate the labor rate and efficiency variances using the fork diagram.
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