P10-21 Vertence Anclysi Nheljplo Lois Ricardo Shirts, Inc., manufactures short. and long-sleeved men's shirts for large stores. Ricardo produces a single-quality shirt in lots to each customer's order and attaches the store's label to each shirt. The standard direct costs for a dozen long-sleeved shirts include: Directmaterials:24yardsat$0.65Directlabor:3hoursat$7.25$15.6021.75 During April, Ricardo worked on three orders for long-sleeved shirts. Job cost records for the month disclose the following: The following additional information is available: a. Ricardo purchased 95,000 yards of material during April at a cost of $66,500. b. Direct labor cost incurred amounted to $80,740 during April. c. There was no work in process at April 1. During April, lots 30 and 31 were completed. At April 30, lot 32 was 100% complete as to materials but only 80% complete as to labor. 1. Compute the materials price variance for April, and show whether the variance was favorable or unfavorable. 2. Determine the materials quantity variance for April in both yards and dollars: a. For the company in total. b. For each lot worked on during the month. 3. Compute the labor rate variance for April, and show whether the variance was favorable or unfavorable. 4. Determine the labor efficiency variance for April in both hours and dollars: a. For the company in total. b. For each lot worked on during the month. 5. In what situations might it be better to express variances in units (hours, yards, and so on) rather than in dollars? In dollars rather than in units? P10-21 Vertence Anclysi Nheljplo Lois Ricardo Shirts, Inc., manufactures short. and long-sleeved men's shirts for large stores. Ricardo produces a single-quality shirt in lots to each customer's order and attaches the store's label to each shirt. The standard direct costs for a dozen long-sleeved shirts include: Directmaterials:24yardsat$0.65Directlabor:3hoursat$7.25$15.6021.75 During April, Ricardo worked on three orders for long-sleeved shirts. Job cost records for the month disclose the following: The following additional information is available: a. Ricardo purchased 95,000 yards of material during April at a cost of $66,500. b. Direct labor cost incurred amounted to $80,740 during April. c. There was no work in process at April 1. During April, lots 30 and 31 were completed. At April 30, lot 32 was 100% complete as to materials but only 80% complete as to labor. 1. Compute the materials price variance for April, and show whether the variance was favorable or unfavorable. 2. Determine the materials quantity variance for April in both yards and dollars: a. For the company in total. b. For each lot worked on during the month. 3. Compute the labor rate variance for April, and show whether the variance was favorable or unfavorable. 4. Determine the labor efficiency variance for April in both hours and dollars: a. For the company in total. b. For each lot worked on during the month. 5. In what situations might it be better to express variances in units (hours, yards, and so on) rather than in dollars? In dollars rather than in units
