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proper answer Rugged Life, Inc., designs and manufactures fleece quarter-zip jackets. It sells its jackets to brand name outdoor outfitters in lots of one dazen.
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Rugged Life, Inc., designs and manufactures fleece quarter-zip jackets. It sells its jackets to brand name outdoor outfitters in lots of one dazen. Rugged Life's May 2017 static budget and actual results for direct inputs are as follows: Static Budget Number of jacket lots (1 lot = 1 300 daren) Per Lot of Jackets: Direct materials 18 yards at $4.65 per yard = $83.70 2.4 hours at $12.50 per hour = $30.00 Direct manufacturing labor Actual Results Number of jacket lots sold 325 Total Direct Inputs: Direct materials 6,500 yards at 54.85 per yard - $31,525 715 hours at $12.60 = 59,009 Direct manufacturing labor Rugged Life has a policy of analyzing all input variances when they add up to more than 8% of the total cost of materials and labor in the flexible budget, and this is true in May 2017. The production manager discusses the sources of the variances: "A new type of material was purchased in May. This led to faster cutting and sewing, but the workers used more material than usual as they learned to work with it. For now, the standards are fine." Required: 1. Calculate the direct materials and direct manufacturing labor price and efficiency var ances in May 2017 2. What is the total flexible-budget variance for both inputs direct materials and direct manufacturing labor combined? 3. What percentage is this variance of the total cost al direct materials and direct manufacturing latar in the lexible budget? 4. Comment on the May 2017 results. Would you continue the Rugged Life, Inc., designs and manufactures fleece quarter-zip jackets. It sells its jackets to brand name outdoor outfitters in lots of one dazen. Rugged Life's May 2017 static budget and actual results for direct inputs are as follows: Static Budget Number of jacket lots (1 lot = 1 300 daren) Per Lot of Jackets: Direct materials 18 yards at $4.65 per yard = $83.70 2.4 hours at $12.50 per hour = $30.00 Direct manufacturing labor Actual Results Number of jacket lots sold 325 Total Direct Inputs: Direct materials 6,500 yards at 54.85 per yard - $31,525 715 hours at $12.60 = 59,009 Direct manufacturing labor Rugged Life has a policy of analyzing all input variances when they add up to more than 8% of the total cost of materials and labor in the flexible budget, and this is true in May 2017. The production manager discusses the sources of the variances: "A new type of material was purchased in May. This led to faster cutting and sewing, but the workers used more material than usual as they learned to work with it. For now, the standards are fine." Required: 1. Calculate the direct materials and direct manufacturing labor price and efficiency var ances in May 2017 2. What is the total flexible-budget variance for both inputs direct materials and direct manufacturing labor combined? 3. What percentage is this variance of the total cost al direct materials and direct manufacturing latar in the lexible budget? 4. Comment on the May 2017 results. Would you continue the Step by Step Solution
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