NOTE: I DON'T WANT THE ANSWER TO BE HANDWRITING. THANK YOU!

Grand Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2024, using 144,000 square feet of extruded vinyl

purchased at $1.45 per square foot. Production required 420 direct labor hours that cost $13.00 per hour. The direct materials standard was seven

square feet of vinyl per fender, at a standard cost of $1.50 per square foot. The labor standard was 0.024 direct labor hour per fender, at a standard

cost of $12.00 per hour.

Requirement

Compute the cost and efficiency variances for direct materials and direct labor.

Does the pattern of variances suggest Grand Fender's managers have been

making trade-offs? Explain.

Begin with the cost variances. Select the required formulas, compute the cost variances for direct materials and direct labor, and identify whether each

variance is favorable (F) or unfavorable (U). (Abbreviations used: AC = actual cost; AQ = actual quantity; FOH = fixed overhead; SC = standard cost;

SQ = standard quantity.)

Formula

Variance

Direct materials cost variance

Direct labor cost variance