Requirement 7 options

1 favorable/unfavorable

2 favorable/unfavorable

3 purchasing inferior/purchasing superior

4 cheaper/more expensive

5 more/less

Kelsey Fabrics manufactures a specialty monogrammed blanket. The following are the cost standards for this blanket: (Click the icon to view the standards.) Actual results from last month's production of 1,700 blankets are as follows: (Click the icon to view the actual results.) Read the requirements Requirements - pearest cent.) st cent.) 1. What is the standard direct material cost for one blanket? 2. What is the actual cost per yard of fabric purchased? 3. Calculate the direct material price and quantity variances. 4. What is the standard direct labor cost for one blanket? 5. What is the actual direct labor cost per hour? 6. Calculate the direct labor rate and efficiency variances. 7. Analyze each variance and speculate as to what may have caused that variance 8. Look at all four variances together (the big picture). How might they all be related? What variance is very likely to have caused the other variances? ive numbers. Enter the variance as fa DM price Data Table Direct materials (fabric).. Direct labor.. 3.0 yards per blanket at $7.00 per yard 1.5 direct labor hours per blanket at $11.00 per hour - X Data Table Calculate the arest centa d: DMD Actual cost of 6,290 yards of direct material (fabric) purchased... $ 40,885 Actual yards of direct material (fabric) used 5,740 Actual wages for 2,670 hours worked. $ 27,234 amounts in or unfavora ne formula fd Requirement 1. What is the standard direct material cost for one blanket? (Round your answer to the nearest cent.) The standard direct material cost for one blanket is Requirement 2. What is the actual cost per yard of fabric purchased? (Round your answer to the nearest cent.) The actual cost per yard of fabric purchased Requirement 3. Calculate the direct material price and quantity variances (Enter the variances as positive numbers. Enter currency amounts in the formula to the nearest cent and then round the final variance amounts to the nearest whole dollar. Label the variance as favorable (F) or unfavorable (U), Abbreviations used: DM = Direct materials) First determine the formula for the price variance, then compute the price variance for direct materials. DM price variance Determine the formula for the quantity variance, then compute the quantity variance for direct materials DM quantity variance ** Requirement 4. What is the standard direct labor cost for one blanket? (Round your answer to the nearest cent.) The standard direct labor cost for one blanket is Requirement 5. What is the actual direct labor cost per hour? (Round your answer to the nearest cent.) The actual direct labor cost per hour is Requirement 6. Calculate the direct labor (DL) rate and efficiency variances (Enter the variances as positive numbers. Enter the currency amounts in the formulas to the nearest cent, then round the final variance amounts to the nearist whole dollar. Label the variance as favorable (F) or unfavorable (U) Abbreviations used: DL = Direct labor) First, determine the formula for the rate variance, then compute the rate variance for direct labor 3D DL rate variance First, determine the formula for the efficiency variance, then compute the efficiency variance for direct labor DL efficiency variance Requirement 7. Analyze each variance and speculate as to what may have caused that variance. The DM price variance and DM quantity variance may have been caused by The cause waste. The DL rate variance and The DL efficiency variance may have been caused by skilled workers commanda wage, however, Requirement 8. Look at all four variances together (the big picture). How might they all be related? What variance is ver likely to have caused the other variances? One possible cause of all four variances is This would create leading to Because workforce was used, the DL rate variance was however, given labor hours were required, creating DL a efficiency variance