Quality Fender, which uses a standard cost system, manufactured 20,000 boat fenders during 2018, using 141,000 square feet of extruded vinyl purchased at $1.10 per square foot. Production required 450 direct labor hours that cost $13.50 per hour. The direct materials standard was seven square feet of vinyl per fender, at a standard cost of $1.15 per square foot. The labor standard was 0.026 direct labor hour per fender, at a standard cost of $12.50 per hour.

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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.)

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		Formula		Variance
Direct materials cost variance	=		=
Direct labor cost variance	=

Direct materials efficiency variance =

Direct labor efficiency variance =