Kelsey Fabrics manufactures a specialty monogrammed blanket. The following are the cost standards for this blanket: (Click the icon to view the standards.) Actual results from last month's production of 2,400 blankets are as follows: 2(Click the icon to view the actual results.) Read the requirements Requirement 1. What is the standard direct material cost for one blanket? (Round your answer to the nearest cent.) The standard direct material cost for one blanket is $ 14.00 Requirement 2. What is the actual cost per yard of fabric purchased? (Round your answer to the nearest cent.) The actual cost per yard of fabric purchased $ 6.50 Requirement 3. Calculate the direct material price and quantity variances (Enter the variances as positive numbers. Enter currency amounts in the formula to the nearest cent and then round the final variance amounts to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U). Abbreviations used: DM = Direct materials) First determine the formula for the price variance, then compute the price variance for direct materials. Actual quantity purchased 5,760 - x x( $ Actual price 7.00 Standard price 6.50 ) = DM price variance = $ 2,880 F Determine the formula for the quantity variance, then compute the quantity variance for direct materials. L (1) (2) L (3) X L x( ) = DM quantity variance ) = (4) A Requirement 4. What is the standard direct labor cost for one blanket? (Round your answer to the nearest cent.) The standard direct labor cost for one blanket is $ Requirement 5. What is the actual direct labor cost per hour? (Round your answer to the nearest cent.) The actual direct labor cost per hour is $ . Requirement 6. Calculate the direct labor (DL) rate and efficiency variances. (Enter the variances as positive numbers. Enter the currency amounts in the formulas to the nearest cent, then round the final variance amounts to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U). Abbreviations used: DL = Direct labor) First, determine the formula for the rate variance, then compute the rate variance for direct labor. (5) X( (6) (7) ) = DL rate variance ) = (8) First, determine the formula for the efficiency variance, then compute the efficiency variance for direct labor. (9) (10) x IX = DL efficiency variance (12) Requirement 7. Analyze each variance and speculate as to what may have caused that variance. DM quantity variance may have been caused The (13) by (15) DM price variance and (14) The (16) cause (17) _ waste. The (18) DL rate variance and (19) - DL efficiency variance may have been caused The (21) skilled workers command a (22) - wage, however, by (20) (23) - Requirement 8. Look at all four variances together (the big picture). How might they all be related? What variance is very likely to have caused the other variances? leading to This would create (25) workforce was used, the DL rate variance was One possible cause of all four variances is (24) (26) . Because (27) (28) however, given a (29) (30) DL efficiency variance. labor hours were required, creating 1: Data Table Direct materials (fabric) Direct labor ................... 2.0 yards per blanket at $7.00 per yard ........... 2.5 direct labor hours per blanket at $17.00 per hour 2: Data Table Actual cost of 5,760 yards of direct material (fabric) purchased ...... $ 37,440 Actual yards of direct material (fabric) used..... ..... 5,310 Actual wages for 6,110 hours worked ..........................$ 100,204 3: Requirements 1. What is the standard direct material cost for one blanket? 2. What is the actual cost per yard of fabric purchased? 3. Calculate the direct material price and quantity variances. 4. What is the standard direct labor cost for one blanket? 5. What is the actual direct labor cost per hour? 6. Calculate the direct labor rate and efficiency variances. 7. Analyze each variance and speculate as to what may have caused that variance. 8. Look at all four variances together (the big picture). How might they all be related? What variance is very likely to have caused the other variances? (20) O utilizing a more-skilled workforce O utilizing a less-skilled workforce (21) O higher O less (22) O higher O lower (23) O do not work as quickly as a more experienced workforce O work more efficiently than a less experienced workforce (24) the initial purchase of inferior raw materials the initial purchase of superior raw materials O (25) O O (26) O O a favorable quantity variance an unfavorable quantity variance (27) O O a higher skilled a lower skilled (28) O O favorable unfavorable (29) O O higher quality material and a more-skilled workforce, less lower quality material and a less-skilled workforce, more a favorable DM price variance while creating more waste a favorable DL price variance an unfavorable DL price variance an unfavorable DM price variance while reducing waste O (30) O O a favorable an unfavorable (14) O favorable O unfavorable (15) O O purchasing inferior raw materials purchasing superior quality raw materials (18) O (16) O cheaper materials that are of a lesser quality O more expensive materials that are of a higher quality (17) O less O more favorable unfavorable 0 (19) O favorable O unfavorable (20) O O utilizing a more-skilled workforce utilizing a less-skilled workforce (21) O higher o less (22) O higher O lower (23) O do not work as quickly as a more experienced workforce O work more efficiently than a less experienced workforce (24) O O the initial purchase of inferior raw materials the initial purchase of superior raw materials (26) O O a favorable quantity variance an unfavorable quantity variance (25) O a favorable DM price variance while creating more waste O a favorable DL price variance O an unfavorable DL price variance O an unfavorable DM price variance while reducing waste (28) O (27) O O a higher skilled a lower skilled favorable unfavorable (29) O higher quality material and a more-skilled workforce, less O lower quality material and a less-skilled workforce, more (30) O O a favorable an unfavorable