Please help with Cost Management ISBN 1285751787

Problem 9.41 page 501-503

The following chart summarizes the direct materials and direct labor variances trom Novem- ber 2014 through April 2015 (extracted from the report provided by Matt). Standards for each laptop cover are as follows: a. Three feet of direct materials at S7.50 per foot b. Forty-five minutes of direct labor at si4 per hour Actual Cost Direct Materials Direct Labor Direct Materials Direct Materials Direct Labor Rate Efficiency Efficiency Month Direct Labor) Price Variance Variance Variance Variance $150,000 S10,000 U $5,000 F $100 U S5,000 F 155,000 5,200 F 110 U 6,500 F January 152,000 10.100 U 4,900 F 05 U 7,750 F February 151,000 4,500 F 95 U 6,950 F March 151,000 4,500 F 95 U 6,950 F March 25,000 9,000 U 3,000 F 8,200 F 2,000 F 90 U 8,500 F In addition, the data for May 2015, but not the variances for the month, are as follows: Laptop covers made in May 2,900 units Total actual direct materials costs incurred S 68,850 Actual quantity of direct materials purchased and used Total actual direct labor cost incurred 8,500 feet. Total actual direct labor hours S 25,910 1,837.6 hours Actual direct labor cost per hour exceeded the budgeted rate by so.10 per hour. atandard Costing A Functional-Based Control Approach Required: I. For May 2015, calculate the price and quantity variances for direct labor and direct materials. 2. Discuss the trend of the direct materials and labor variances. 3. What type of actions must the workers have taken during the period they were being observed for the setting of standards? what can be done to ensure that the standards are set correctly? (CMA adapted) CYBER-RESEARCH CASE