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)$2.28Direct labor (0.75 hr. @ $7.40)5.55Standard 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$63,630Direct labor$179,724 (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:

Usage variance:

Labor Variances

Rate variance:

Efficiency variance: