Hull Guard, which used a standard cost accounting system, manufactured 240,000 boat fenders during the year, using 1,540,000 feet of extruded vinyl purchased at $1.40 per foot. Production required 4,400 direct labor hours that cost $16.50 per hour. The materials standard was 6 feet of vinyl per fender at a standard cost of $1.55 per foot. The labor standard was 0.026 direct labor hour per fender at a standard cost of $15.50 per hour. Read the requirements. Requirement 1. Compute the price and quantity variances for direct materials. Compute the rate and efficiency variances for direct labor. (Enter the variances as positive numbers. Enter currency amounts to the nearest cent and your answers to the nearest whole dollar. Label the variances as favorable (F) or unfavorable (U). Abbreviations used: DM = Direct materials, DL = Direct labor.) Begin with the variances for direct materials. First, determine the formula for the direct materials price variance, then compute the price variance for direct materials. (Assume that the quantity of materials purchased is equal to the quantity of materials used.) Actual quantity purchased Standard price 1( Actual price DM price variance

Hul Guard, which used a standard cost acoounting syslemy manulactured 240,000 bout fenders during the year, using 1,540,000 feet of extruded vinyl purchased at $1,40 per foot Froducton equired 4.400 direct labor hours that cost $16.50 per hour. The materists standard was 6 feet of vinyt per fonder at a standard cont of $1.55 per foot The laber standard was 0.026 direct labor hour cer fender at a standard cost of $15.50 pec hour. Read the reovirements materials purchased a equal to the quantiy of materiats used.) ounts to the nearest cent and your answers to the nearest whole dollar. Label the variances as favorable (F) or unfavorable (U). Abbreviations gin with the variances terials purchased is Actual quantity purc Requirements 1. Compute the price and quantity variances for direct materials. Compute the rate and efficiency variances for direct labor. 2. Does the pattern of variances suggest that the company's managers have been making trade-offs? Explain