Requirements

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 berelated? What variance is very likely to have caused the other variances?

Dazzle Fabrics manufactures a specialty monogrammed blanket. The following are the cost standards for this blanket:

Data Table

Direct materials (fabric). . . . . . . . 2.0 yards per blanket at $7.00 per yard

Direct labor. . . . . . . . . . . . . . . . . 0.5 direct labor hours per blanket at $19.00 per hour

Actual results from last month's production of 2,400 blankets are as follows

Data Table

Actual cost of 6,240 yards of direct material (fabric) purchased. . . . . .$40,560

Actual yards of direct material (fabric) used. . . . . . . . . . . . . . . . . .5,540

Actual wages for 1,350 direct labor hours worked. . . . . . . . . . . . .$24,840