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 (2.4 lbs. @ $0.95)	$2.28
Direct labor (0.75 hr. @ $7.40)	5.55
Standard prime cost	$7.83

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	$63,000
Direct labor	$181,357 (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	FavorableUnfavorable
Usage variance	$fill in the blank 3	FavorableUnfavorable
Labor Variances
Rate variance	$fill in the blank 5	FavorableUnfavorable
Efficiency variance	$fill in the blank 7	FavorableUnfavorable