Materials and Labor Variances

Deporte Company produces single$-$colored t$-$shirts. Materials for the shirts are dyed in large vats. After dying the materials for a given color, the vats must be cleaned and prepared for the next batch of materials to be colored. The following standards for changeover for a given batch have been established:

Direct materials $(2\mathrm{.}4$ lbs$.$ @ $$0\mathrm{.}95)$ $$2\mathrm{.}28$

Direct labor $(0\mathrm{.}75$ hr$.$ @ $$7\mathrm{.}40)5\mathrm{.}55$

Standard prime cost $$7\mathrm{.}83$

During the year, $79,500$ pounds of material were purchased and used for the changeover activity. There were $30,000$ batches produced, with the following actual prime costs:

Direct materials $$71,820$

Direct labor $$186,259($for $22,450$ hrs$.)$

Required:

Compute the materials and labor variances associated with the changeover activity, labeling each variance as favorable or unfavorable.

Material Variances

Price variance $fill in the blank $1$

Favorable

Usage variance $fill in the blank $3$

Unfavorable

Labor Variances

Rate variance $fill in the blank $5$

Unfavorable

Efficiency variance $fill in the blank $7$

Favorable