JayCo Ltd. makes two kinds of nylon blend string for their tennis racquets. Nylon (the main ingredient) is purchased by the yard then blended with one of their two patented blends to make a Speed string and a Power string (both measured in packs). Jason is concerned about the cost of the string production and has asked you to do a variance analysis given the following information from last year: Actual Packs of string made: 590,000 yards of nylon purchased 25,000 DL hours $445,000 total cost of nylon $290,000 Labor cost 2,000 unused yards $155,000 VOH - Beg. Inv. 588,000 yards used

Packs of string made:

Speed Power 85,000 84000

Standards Quantity Price Power DM 3.5 yards/pack $0.75 per yard 84,000 Speed 0.15 DLhr/pack $11.50 per hr Power 0.15 DLhr/pack $11.50 per hr VOH based on DLhrs $6.00 per hr Calculate the Direct Materials Spending Variance Materials price variance "Actual Quantity of Input @ Standard Price" Materials quantity variance AQ = label SQ = label AP = label (<--for MPV) SP = label Actual TC = Standard TC = Materials price variance: Materials quantity variance: favorable or unfavorable ? --> Select: (for MQV --> ) favorable or unfavorable ? --> Select: Calcualte the Direct Labor Spending Variance Labor rate variance "Actual Labor Hours @ Standard Rate" Labor efficiency variance AH = label SH = label AR = label (AH * SR) = SR = label Actual TC = Standard TC = Labor rate variance: Labor efficiency variance: favorable or unfavorable ? --> Select: Spending variance favorable or unfavorable ? --> Select: Total DL variance: favorable or unfavorable ? --> Select: unfavorable Calculate the Variable Overhead Spending Variance Variable OH rate variance "Actual Labor Hours @ Standard Rate" Variable OH efficiency variance AH = label SH = label AR = label (AH * SR) = SR = label Actual TC = Standard TC = Variable OH rate variance: Variable OH efficiency variance: favorable or unfavorable ? --> Select: Spending variance favorable or unfavorable ? --> Select: Total Variable OH variance: favorable or unfavorable ? --> Select: unfavorable Based on what you found above, what are some ways that Jason could reduce costs?