Required:

For May 2015, calculate the price and quantity variances for direct labor and direct materials. Round intermediate calculations and final answers to two decimal places.

MPV
MUV
LRV
LEV

Setting Standards, Calculating and Using Varlances Leather Works is a family-owned maker of leather travel bags and briefcases located in the northeastern part of the United States. Foreign competition has forced its owner, Heather Gray, to explore new ways to meet the competition One of her cousins, Wallace Hayes, who recently graduated from college with a major in accounting, told her about the use of cost variance analysis to learn about efficiencies of production. In May 2014, Heather asked Matt Jones, chief accountant and Alfred Prudest, production manager, o implement a standard costing system Matt end Alfred in turn, retained Shannon L kam, an accounting professor at Harding's College, to set up a standard costing system by using information supplied to her by Matt's and Alfred's staff. To verify that the information was accurate, Shannon visited the plant and measured workers' output using time and motion studies, During those visits, she was not accompanied by either Matt or Alfred, and the workers knew about Shannon's schedule in advance. The cost system was implemented in June 2014. Recently, the following dialogue took place among Heather, Matt, and Alfred HEATHER: How is the business performing? ALFRED: You know, we are producing a lot more than we used to, thanks to the contract that you helped obtain from Lean, Inc., for laptop covers. (Lean is a national supplier of computer accessories.) MATT: Thank goodness for that new product. It has kept us from sinking even more due to the inroads into our business made by those foreign suppliers of leather goods. HEATHER: What about the stendard costing system? MATT: The vanances are mostly favorable, except for the first few months when the supplier of leather started charging more. HEATHER: How did the union members take to the standards ALFRED: Not bad. They grumbled a bit at first, but they have taken it in stride. We've consistently shown favorable direct labor efficiency variances and direct materials usage variances. The direct labor rate variance has been flat. MATT: It should be since direct labor rates are negotiated by the union representative at the start of the year and remain the same for the entire year HEATHER: Matt, would you send me the variance report for laptap covers immediately? The following chart summarizes the direct materials and direct labor variances from November 2014 through April 2015 (extracted from the report provided by Matt). Standards for cach laptop cover are as follows . Three feet of direct materials at $7.50 per foot. b. Forty-five minutes of direct labor at $14 per hour Actual Cost Direct Materias Direct Materials +Direct Labor Price Variance Direct Materials Direct Labor Efficiency Direct Labor Rate Efficiency Variance Month November December January February March April Variance Variance 150,000 155,000 152,000 151,000 125,000 115,000 $10,000 UU 11,000 U 10,100 U 9,900 U 9,000 U 8,000 U 5,000 F 5,200 F 4,900 F 4,500 F 3,000 F 2,000 F $100 U 110 U 105 U 95 U 90 U 90 U 55,000 F 6,500 F 7,750 F 6,950 F 8,200 F 8,500 F In addition, the data for May 2015, but not the varlances for the month, are as follows Laptop covers made in May Total actual direct materials costs incurred Actual quantity of direct materials purchased and used Total actual direct labor cost incurred Total actual direct labor hours 2,900 units 8,500 feet 1,837.6 hours S 68,830 S 25,910 Actual direct labor cost per hour exceeded the budgeted rate by $0.10 per hour