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REINERT OUTDOOR SUPPLY Reinert Outdoor Supply manufactures a portable, back-packable tent. Standards for direct materials and direct labor to manufacture the tent are shown below:

REINERT OUTDOOR SUPPLY
Reinert Outdoor Supply manufactures a portable, back-packable tent. Standards for direct materials
and direct labor to manufacture the tent are shown below:
Direct materials:
Fabric in finished tent (square yards) 11
Allowance for anticipted waste 1
Total standard fabric quantity per tent 12
Purchase price per square yard of fabric $ 7.75
Transportation cost per square yard 0.25
Standard price per square yard of fabric $ 8.00
Direct labor:
Hours required per tent 2
Standard rate per hour $18
The CEO of Reinert Outdoor Supply, Laramie, glanced at the cost report and saw that actual direct
materials used was $202,125 while being budgeted at only $192,000.
He also reviewed direct labor, and saw that actual labor cost was $70,350 while budgeted
labor cost was $72,000, good news! Laramie wanted to know why the differences existed in these
costs and asked you to prepare an analysis of these costs.
You investigated numbers, and found the following: In October, Reinert Outdoor Supply produced
2,000 portable tents and incurred the following actual direct materials and direct labor costs:
Purchased 25,000 sq yds of tent fabric at $8.25 per sq yd
Used 24,500 sq yds of tent fabric
Used 4,200 hours of direct labor at $16.75 per hour
Required:
1) Compute the direct materials price variances for both amounts purchased and used.
2) Compute the direct materials quantity variances for the amounts used.
3) Compute the direct labor rate variance.
4) Compute the direct labor efficiency variance.

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