Green Blankets, Inc. uses a standard cost system to plan, direct, and control operations. The company converts green yarn into $3$x$5$ blankets and sells them to distributors.

Management allocates variable and fixed overhead based on direct labor hours.

Green Blankets, Inc.

Partial Income Statement

For the month ended July $31,20$XX

actual budget $($AC $-$ SC$)$ x AQ

Sales in units $2,000\mathrm{.}002,000\mathrm{.}00($AQ $-$ SQ$)$ x SC

Average sales price per unit $125\mathrm{.}00125\mathrm{.}00($AQ x AC$)-($SQ x SC$)$

AFO $-$ BFO

Sales revenue $250,000\mathrm{.}00250,000\mathrm{.}00($total budgeted production X standard quantity for one blanket$)$

Variable manufacturing costs $($total cost $/$ total quantity$)$

Direct materials $81,000\mathrm{.}0056,000\mathrm{.}00$ budgeted fixed overhead $-$ allocated

Direct Labor $99,000\mathrm{.}0096,000\mathrm{.}00$ actual $-$ budget

Allocated overhead $22,500\mathrm{.}0016,000\mathrm{.}00$

Fixed manufacturing costs $--$

Allocated overhead $63,000\mathrm{.}0050,000\mathrm{.}00$

Cost of Goods Manufactured and sold $265,500\mathrm{.}00218,000\mathrm{.}00$

Gross Profit $$(15,500\mathrm{.}00)$ $$32,000\mathrm{.}00$

COMPUTE THE DIRECT MATERIALS COST VARIANCE

The standard amount of yarn for one blanket is $1,400\mathrm{.}00$ yards

Select the correct formula:

What is the total quantity of direct materials budgeted $($SQ$)?$ yards

Select the correct formula:

What is the standard direct materials cost per unit $($SC$)?$ per yard

Direct materials purchased and used $($AQ$)$: $2,700,000$ yards of green yarn

Select the correct formula:

What is the actual direct materials cost per unit $($AC$)?$ per yard

Select the correct formula:

What is the direct materials cost variance?

Interpret this variance

COMPUTE THE DIRECT MATERIALS EFFICIENCY VARIANCE

Select the correct formula:

What is the direct materials efficiency variance?

Interpret this variance

COMPUTE THE DIRECT LABOR COST VARIANCE

The standard amount of time for one blanket is: $4$ hours

Select the correct formula:

What is the total quantity of direct LABOR budgeted $($SQ$)?$ hours

Select the correct formula:

What is the standard direct labor cost per hour $($SC$)?$ per hour

Direct labor incurred $($AQ$)$: $9,000\mathrm{.}00$ hours

Select the correct formula:

What is the actual direct labor cost per hour $($AC$)?$ per hour

Select the correct formula:

What is the direct labor cost variance?

Interpret this variance

COMPUTE THE DIRECT LABOR EFFICIENCY VARIANCE

Select the correct formula:

What is the direct labor efficiency variance?

Interpret this variance

COMPUTE THE VARIABLE OVERHEAD COST VARIANCE

The standard amount of time for one blanket is: $4$ hours

Select the correct formula:

What is the total quantity of direct LABOR budgeted $($SQ$)?$ hours

Select the correct formula:

What is the standard variable overhead cost per hour $($SC$)?$ per hour

Direct labor incurred $($AQ$)$: $9,000\mathrm{.}00$ hours

Select the correct formula:

What is the actual variable overhead cost per hour $($AC$)?$ per hour

Select the correct formula:

What is the variable overhead cost variance?

Interpret this variance

COMPUTE THE VARIABLE OVERHEAD EFFICIENCY VARIANCE

Select the correct formula:

What is the variable overhead efficiency variance?

Interpret this variance

COMPUTE THE FIXED OVERHEAD VARIANCE

Select the correct formula:

What is the fixed overhead variance?

Interpret this variance