Kilmartin Fabrics manufactures a specialty monogrammed blanket. The following are the cost standards for this blanket:
Actual results from last month's production of 2,100 blankets are as follows:
i x Data Table Actual cost of 7,140 yards of direct material (fabric) purchased Actual yards of direct material (fabric) used Actual wages for 2,210 hours worked... $ 71,400 6,590 $ 28,951 Print Done i - X Data Table Direct materials (fabric). Direct labor.. 3.0 yards per blanket at $10.50 per yard . 1 direct labor hours per blanket at $14.00 per hour Print Done 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 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 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. * DM price variance x Determine the formula for the quantity variance, then compute the quantity variance for direct materials. ) = DM quantity variance - 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. DL rate variance First, determine the formula for the efficiency variance, then compute the efficiency variance for direct labor. ) = DL efficiency variance Requirement 7. Analyze each variance and speculate as to what may have caused that variance. The VDM price variance and V DM quantity variance may have been caused by V. The cause v waste. The V DL rate variance and V DL efficiency variance may have been caused by The skilled workers command a wage, however, 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? One possible cause of all four variances is This would create V leading to V. Because workforce was used, the DL rate variance was however, given a V labor hours were required, creating V DL efficiency variance
